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Hedge Funds Are Buying J&J Snack Foods Corp. (JJSF): The Hain Celestial Group, Inc. (HAIN), Gruma S.A.B. de C.V. (ADR) (GMK)

J&J Snack Foods Corp. (NASDAQ:JJSF) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. JJSF has seen an increase in hedge fund interest lately. There were 6 hedge funds in our database with JJSF positions at the end of the previous quarter.

J&J Snack Foods Corp. (NASDAQ:JJSF)

To most traders, hedge funds are perceived as underperforming, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey look at the elite of this club, about 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total asset base, and by tracking their highest performing equity investments, we have unsheathed a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Just as key, bullish insider trading sentiment is a second way to break down the world of equities. There are a number of stimuli for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this strategy if shareholders know where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action encompassing J&J Snack Foods Corp. (NASDAQ:JJSF).

Hedge fund activity in J&J Snack Foods Corp. (NASDAQ:JJSF)

At year’s end, a total of 10 of the hedge funds we track held long positions in this stock, a change of 67% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in J&J Snack Foods Corp. (NASDAQ:JJSF), worth close to $53 million, accounting for 0.2% of its total 13F portfolio. On Royce & Associates’s heels is Third Avenue Management, managed by Martin Whitman, which held a $23 million position; 0% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Jim Simons’s Renaissance Technologies, Mario Gabelli’s GAMCO Investors and Israel Englander’s Millennium Management.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most outsized position in J&J Snack Foods Corp. (NASDAQ:JJSF). Millennium Management had 1 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $0 million position during the quarter. The following funds were also among the new JJSF investors: Paul Tudor Jones’s Tudor Investment Corp, Steven Cohen’s SAC Capital Advisors, and John Overdeck and David Siegel’s Two Sigma Advisors.

Insider trading activity in J&J Snack Foods Corp. (NASDAQ:JJSF)

Insider buying is best served when the primary stock in question has seen transactions within the past six months. Over the last six-month time period, J&J Snack Foods Corp. (NASDAQ:JJSF) has experienced 1 unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to J&J Snack Foods Corp. (NASDAQ:JJSF). These stocks are The Hain Celestial Group, Inc. (NASDAQ:HAIN), Gruma S.A.B. de C.V. (ADR) (NYSE:GMK), TreeHouse Foods Inc. (NYSE:THS), Snyder S Lance Inc (NASDAQ:LNCE), and B&G Foods, Inc. (NYSE:BGS). This group of stocks belong to the processed & packaged goods industry and their market caps are similar to JJSF’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
The Hain Celestial Group, Inc. (NASDAQ:HAIN) 20 1 1
Gruma S.A.B. de C.V. (ADR) (NYSE:GMK) 1 0 0
TreeHouse Foods Inc. (NYSE:THS) 11 0 6
Snyder S Lance Inc (NASDAQ:LNCE) 6 0 5
B&G Foods, Inc. (NYSE:BGS) 9 0 4

With the returns demonstrated by our research, retail investors must always pay attention to hedge fund and insider trading activity, and J&J Snack Foods Corp. (NASDAQ:JJSF) is no exception.

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