Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Do Hedge Funds Agree With Barclays PLC (ADR) (BCS)’s Top Consumer Stocks Like PepsiCo, Inc. (PEP) And Mondelez International Inc (MDLZ)?

Page 1 of 2

Barclays PLC (ADR) (NYSE:BCS) has announced its top stock picks for its latest Americas Top Picks List in different sectors. In the Consumer sector, Barclays picks include food and beverage companies like PepsiCo, Inc. (NYSE:PEP) and Mondelez International Inc (NASDAQ:MDLZ) and the food retailer company, Sprouts Farmers Market Inc (NASDAQ:SFM). How do hedge funds feel about these stocks? Let’s crunch the numbers and find out.

Barclays PLC (ADR) (NYSE:BCS)

Most investors don’t understand hedge funds and indicators that are based on hedge fund and insider activity. They ignore hedge funds because of their recent poor performance in the long-running bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns enjoyed (or not) by investors. We uncovered through extensive research that hedge funds’ long positions in small-cap stocks actually greatly outperformed the market from 1999 to 2012, and built a system around this. The 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 80 percentage points since the end of August 2012 when this system went live, returning a cumulative 135% vs. less than 55% for the S&P 500 Index (read the details). Likewise, other research (not our own) has shown insider purchases are also effective piggybacking methods for investors that lead to greater returns. That’s why we believe investors should pay attention to what hedge funds and insiders are buying and keep them apprised of this information.

Barclays PLC (ADR) (NYSE:BCS) mentioned that it still holds PepsiCo, Inc. (NYSE:PEP) as its top pick in the U.S. Beverages and Tobacco segment. It believes that PepsiCo, Inc. (NYSE:PEP) will continue to meet or beat expectations for the rest of this year. Barclays acknowledged the fact that currency headwinds might play a role, but it thinks that the company’s underlying growth is holding up well in a slow-paced market space. It thinks that the activist influence on the stock might help the company in delivering strong results as well, and that the attractive cash returns along with target-meeting capabilities should push the stock up further in 2015. Barclays has set a price target of $111 on the stock, which is 19% more from what the stock closed at on Tuesday.

At the end of the first quarter, there were 61 hedge funds with a cumulative investment of $8.02 billion in Pepsi, a hike up from the 54 hedge funds with $7.17 billion of the stock at the end of 2014. The 10% increase in capital investment by hedge funds in the stock came amid a minuscule 0.3% gain for it in the first three months of the year, showing the hike in capital was through more shares being bought. Donald Yacktman‘s Yacktman Asset Management holds the largest position in the stock with 25.5 million shares valued at $2.4 billion; comprising 11.2% of the hedge fund’s total 13F portfolio. Notably, James Dinan‘s York Capital Management opened up the largest ‘Call’ position in the stock by buying call options underlying around 8.7 million shares in the quarter. All of the above stats shows that the smart money was indeed bullish on the stock. But what about insiders? There were no insider purchases of the stock, but there were quite a few insider sales. CEO of PepsiCo, Inc. (NYSE:PEP), Indra Nooyi sold over 58,000 shares in May, while CEO, America Beverages, Albert Carey sold nearly 45,000 shares, also in May.

James Dinan
James Dinan
York Capital Management
Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!