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H.J. Heinz Company (HNZ): Are Hedge Funds Right About This Stock?

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H.J. Heinz Company (NYSE:HNZ) has experienced an increase in support from the world’s most elite money managers recently.

If you’d ask most investors, hedge funds are seen as underperforming, outdated investment tools of yesteryear. While there are more than 8000 funds trading today, we hone in on the leaders of this club, close to 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total capital, and by tracking their top investments, we have found a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as beneficial, positive insider trading activity is a second way to break down the stock market universe. Obviously, there are many incentives for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this method if piggybackers understand where to look (learn more here).

Consequently, let’s take a gander at the key action encompassing H.J. Heinz Company (NYSE:HNZ).

What does the smart money think about H.J. Heinz Company (NYSE:HNZ)?

In preparation for this quarter, a total of 37 of the hedge funds we track held long positions in this stock, a change of 131% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially.

H.J. Heinz Company (NYSE:HNZ)Of the funds we track, York Capital Management, managed by James Dinan, holds the largest position in H.J. Heinz Company (NYSE:HNZ). York Capital Management has a $343.1 million position in the stock, comprising 7.5% of its 13F portfolio. Coming in second is Doug Silverman and Alexander Klabin of Senator Investment Group, with a $306.9 million call position; the fund has 3.6% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Robert Emil Zoellner’s Alpine Associates, Phill Gross and Robert Atchinson’s Adage Capital Management and Jane Mendillo’s Harvard Management Co.

As one would reasonably expect, some big names were breaking ground themselves. York Capital Management, managed by James Dinan, assembled the biggest position in H.J. Heinz Company (NYSE:HNZ). York Capital Management had 343.1 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also initiated a $306.9 million position during the quarter. The following funds were also among the new HNZ investors: Robert Emil Zoellner’s Alpine Associates, Phill Gross and Robert Atchinson’s Adage Capital Management, and Jane Mendillo’s Harvard Management Co.

How have insiders been trading H.J. Heinz Company (NYSE:HNZ)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past half-year. Over the last six-month time period, H.J. Heinz Company (NYSE:HNZ) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to H.J. Heinz Company (NYSE:HNZ). These stocks are Post Holdings Inc (NYSE:POST), Lancaster Colony Corp. (NASDAQ:LANC), The WhiteWave Foods Co (NYSE:WWAV), Unilever plc (ADR) (NYSE:UL), and Kraft Foods Group Inc (NASDAQ:KRFT). This group of stocks are the members of the food – major diversified industry and their market caps are similar to HNZ’s market cap.

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