General Mills, Inc. (GIS) Dips on Analyst Downgrade, Downside Risk

Because General Mills, Inc. (NYSE:GIS) has experienced falling interest from the smart money, logic holds that there lies a certain “tier” of hedgies that slashed their full holdings in the first quarter. It’s worth mentioning that Israel Englander’s Millennium Management cut the largest stake of all the hedgies watched by Insider Monkey, worth an estimated $31.9 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its stock, about $22.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 fund in the fourth quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as General Mills, Inc. (NYSE:GIS) but similarly valued. These stocks are Banco Bradesco SA (ADR) (NYSE:BBD), Illinois Tool Works Inc. (NYSE:ITW), Royal Bank of Scotland Group plc (ADR) (NYSE:RBS), and Charles Schwab Corp (NYSE:SCHW). This group of stocks’ market valuations are similar to GIS’s market valuation.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $763 million. That figure was $482 million in GIS’s case. Charles Schwab Corp (NYSE:SCHW) is the most popular stock in this table. On the other hand Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) is the least popular one with only 10 bullish hedge fund positions. General Mills, Inc. (NYSE:GIS) 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. In this regard SCHW might be a better candidate to consider a long position in.

Disclosure: None