The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Seneca Foods Corp (NASDAQ:SENEA).
Seneca Foods Corp (NASDAQ:SENEA) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds' portfolios at the end of the first quarter of 2020. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as ViewRay, Inc. (NASDAQ:VRAY), Clean Energy Fuels Corp (NASDAQ:CLNE), and Caesarstone Ltd (NASDAQ:CSTE) to gather more data points. Our calculations also showed that SENEA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_845793" align="aligncenter" width="399"] Peter Rathjens of Arrowstreet Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to take a peek at the recent hedge fund action encompassing Seneca Foods Corp (NASDAQ:SENEA).
How are hedge funds trading Seneca Foods Corp (NASDAQ:SENEA)?
Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in SENEA a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Seneca Foods Corp (NASDAQ:SENEA), with a stake worth $16.8 million reported as of the end of September. Trailing Royce & Associates was Renaissance Technologies, which amassed a stake valued at $6.1 million. Arrowstreet Capital, Citadel Investment Group, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Seneca Foods Corp (NASDAQ:SENEA), around 0.23% of its 13F portfolio. Arbiter Partners Capital Management is also relatively very bullish on the stock, designating 0.04 percent of its 13F equity portfolio to SENEA.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Marshall Wace LLP. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let's now take a look at hedge fund activity in other stocks similar to Seneca Foods Corp (NASDAQ:SENEA). These stocks are ViewRay, Inc. (NASDAQ:VRAY), Clean Energy Fuels Corp (NASDAQ:CLNE), Caesarstone Ltd (NASDAQ:CSTE), and Zynex, Inc. (NASDAQ:ZYXI). This group of stocks' market values are closest to SENEA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VRAY,12,81516,-10 CLNE,8,18073,-2 CSTE,10,14694,1 ZYXI,7,8332,0 Average,9.25,30654,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $25 million in SENEA's case. ViewRay, Inc. (NASDAQ:VRAY) is the most popular stock in this table. On the other hand Zynex, Inc. (NASDAQ:ZYXI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Seneca Foods Corp (NASDAQ:SENEA) is even less popular than ZYXI. Hedge funds dodged a bullet by taking a bearish stance towards SENEA. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately SENEA wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); SENEA investors were disappointed as the stock returned -16.1% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.