Is Flowers Foods, Inc. (NYSE:FLO) worth your attention right now? The best stock pickers are becoming more confident. The number of bullish hedge fund bets improved by 2 in recent months.
In the financial world, there are dozens of gauges market participants can use to analyze their holdings. Some of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can trounce the S&P 500 by a significant amount (see just how much).
Just as key, bullish insider trading sentiment is another way to parse down the stock market universe. Obviously, there are a variety of incentives for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this strategy if piggybackers know where to look (learn more here).
Keeping this in mind, let’s take a peek at the latest action surrounding Flowers Foods, Inc. (NYSE:FLO).
Hedge fund activity in Flowers Foods, Inc. (NYSE:FLO)
In preparation for this year, a total of 13 of the hedge funds we track were bullish in this stock, a change of 18% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Flowers Foods, Inc. (NYSE:FLO). Citadel Investment Group has a $81 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $58 million position; 0.9% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Larry Foley and Paul Farrell’s Bronson Point Partners, Mario Gabelli’s GAMCO Investors and John Lykouretzos’s Hoplite Capital Management.
Now, key hedge funds have been driving this bullishness. Hoplite Capital Management, managed by John Lykouretzos, established the biggest position in Flowers Foods, Inc. (NYSE:FLO). Hoplite Capital Management had 21 million invested in the company at the end of the quarter. SAC Subsidiary’s Sigma Capital Management also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Steven Cohen’s SAC Capital Advisors and Jeffrey Vinik’s Vinik Asset Management.
How are insiders trading Flowers Foods, Inc. (NYSE:FLO)?
Insider buying is best served when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, Flowers Foods, Inc. (NYSE:FLO) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Flowers Foods, Inc. (NYSE:FLO). These stocks are Gruma S.A.B. de C.V. (ADR) (NYSE:GMK), The Hain Celestial Group, Inc. (NASDAQ:HAIN), Ingredion Inc (NYSE:INGR), Ralcorp Holdings, Inc. (NYSE:RAH), and Hillshire Brands Co (NYSE:HSH). This group of stocks belong to the processed & packaged goods industry and their market caps are similar to FLO’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Gruma S.A.B. de C.V. (ADR) (NYSE:GMK)||1||0||0|
|The Hain Celestial Group, Inc. (NASDAQ:HAIN)||20||1||1|
|Ingredion Inc (NYSE:INGR)||16||0||6|
|Ralcorp Holdings, Inc. (NYSE:RAH)||31||0||9|
|Hillshire Brands Co (NYSE:HSH)||33||0||2|
With the results demonstrated by our studies, retail investors should always monitor hedge fund and insider trading activity, and Flowers Foods, Inc. (NYSE:FLO) is an important part of this process.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.