The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded SpartanNash Company (NASDAQ:SPTN) based on those filings.
SpartanNash Company (NASDAQ:SPTN) was in 18 hedge funds' portfolios at the end of September. SPTN investors should be aware of a decrease in hedge fund sentiment in recent months. There were 20 hedge funds in our database with SPTN positions at the end of the previous quarter. Our calculations also showed that SPTN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to 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 has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to check out the new hedge fund action regarding SpartanNash Company (NASDAQ:SPTN).
How have hedgies been trading SpartanNash Company (NASDAQ:SPTN)?
At Q3's end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SPTN over the last 17 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
The largest stake in SpartanNash Company (NASDAQ:SPTN) was held by AQR Capital Management, which reported holding $8.8 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $6.5 million position. Other investors bullish on the company included Millennium Management, Two Sigma Advisors, and Marshall Wace. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to SpartanNash Company (NASDAQ:SPTN), around 0.44% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, earmarking 0.17 percent of its 13F equity portfolio to SPTN.
Since SpartanNash Company (NASDAQ:SPTN) has experienced declining sentiment from the aggregate hedge fund industry, it's easy to see that there were a few money managers that slashed their full holdings last quarter. It's worth mentioning that Gregg J. Powers's Private Capital Management sold off the biggest stake of the 750 funds monitored by Insider Monkey, worth an estimated $3.9 million in stock. Peter Rathjens, Bruce Clarke and John Campbell's fund, Arrowstreet Capital, also said goodbye to its stock, about $1.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as SpartanNash Company (NASDAQ:SPTN) but similarly valued. We will take a look at XBiotech Inc. (NASDAQ:XBIT), Verso Corporation (NYSE:VRS), United States Lime & Minerals, Inc. (NASDAQ:USLM), and Evolus, Inc. (NASDAQ:EOLS). All of these stocks' market caps resemble SPTN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XBIT,6,7161,-1 VRS,22,117951,0 USLM,3,29576,-1 EOLS,7,12894,-5 Average,9.5,41896,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $40 million in SPTN's case. Verso Corporation (NYSE:VRS) is the most popular stock in this table. On the other hand United States Lime & Minerals, Inc. (NASDAQ:USLM) is the least popular one with only 3 bullish hedge fund positions. SpartanNash Company (NASDAQ:SPTN) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on SPTN as the stock returned 19.7% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.