Is The Hershey Company (NYSE:HSY) the right investment to pursue these days? Investors who are in the know are buying. The number of long hedge fund positions went up by 4 recently. Our calculations also showed that HSY isn't among the 30 most popular stocks among hedge funds. HSY was in 33 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 29 hedge funds in our database with HSY holdings at the end of the previous quarter.
In today’s marketplace there are a lot of metrics investors put to use to grade stocks. Two of the most underrated metrics are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can outclass the broader indices by a very impressive amount (see the details here).
We're going to check out the recent hedge fund action regarding The Hershey Company (NYSE:HSY).
What does the smart money think about The Hershey Company (NYSE:HSY)?
At the end of the fourth quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. On the other hand, there were a total of 24 hedge funds with a bullish position in HSY a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of The Hershey Company (NYSE:HSY), with a stake worth $252.2 million reported as of the end of September. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $126.1 million. AQR Capital Management, Millennium Management, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, some big names have jumped into The Hershey Company (NYSE:HSY) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the largest position in The Hershey Company (NYSE:HSY). Point72 Asset Management had $14 million invested in the company at the end of the quarter. Lee Ainslie's Maverick Capital also made a $7.1 million investment in the stock during the quarter. The other funds with new positions in the stock are James Dondero's Highland Capital Management, Claes Fornell's CSat Investment Advisory, and Ian Simm's Impax Asset Management.
Let's also examine hedge fund activity in other stocks similar to The Hershey Company (NYSE:HSY). These stocks are Pioneer Natural Resources Company (NYSE:PXD), Ingersoll-Rand Plc (NYSE:IR), T. Rowe Price Group, Inc. (NASDAQ:TROW), and ONEOK, Inc. (NYSE:OKE). All of these stocks' market caps resemble HSY's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PXD,62,2388164,4 IR,43,1477676,1 TROW,22,290370,5 OKE,26,471015,-5 Average,38.25,1156806,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.25 hedge funds with bullish positions and the average amount invested in these stocks was $1157 million. That figure was $691 million in HSY's case. Pioneer Natural Resources Company (NYSE:PXD) is the most popular stock in this table. On the other hand T. Rowe Price Group, Inc. (NASDAQ:TROW) is the least popular one with only 22 bullish hedge fund positions. The Hershey Company (NYSE:HSY) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately HSY wasn't in this group. Hedge funds that bet on HSY were disappointed as the stock returned 4.0% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.