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Hedge Funds Are Crazy About Fresh Del Monte Produce Inc (FDP)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Fresh Del Monte Produce Inc (NYSE:FDP) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Fresh Del Monte Produce Inc was in 10 hedge funds’ portfolios at the end of the third quarter of 2015. FDP investors should be aware of an increase in hedge fund sentiment of late. There were 8 hedge funds in our database with FDP positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Avista Corp (NYSE:AVA), Stantec Inc. (USA) (NYSE:STN), and The Men’s Wearhouse, Inc. (NYSE:MW) to gather more data points.

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To most market participants, hedge funds are seen as worthless, old investment vehicles of the past. While there are over 8000 funds in operation at the moment, Our experts choose to focus on the crème de la crème of this club, around 700 funds. Most estimates calculate that this group of people administer the lion’s share of all hedge funds’ total capital, and by keeping an eye on their inimitable investments, Insider Monkey has come up with various investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, we’re going to take a glance at the key action surrounding Fresh Del Monte Produce Inc (NYSE:FDP).

What have hedge funds been doing with Fresh Del Monte Produce Inc (NYSE:FDP)?

Heading into Q4, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Gotham Asset Management, managed by Joel Greenblatt, holds the most valuable position in Fresh Del Monte Produce Inc (NYSE:FDP). Gotham Asset Management has a $12.1 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $9.6 million position; 0.1% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions encompass Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

As industrywide interest jumped, key money managers have jumped into Fresh Del Monte Produce Inc (NYSE:FDP) headfirst. Gotham Asset Management, managed by Joel Greenblatt, established a position in Fresh Del Monte Produce Inc (NYSE:FDP). Gotham Asset Management had $12.1 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.3 million investment in the stock during the quarter. The only other fund with a brand new FDP position is John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Fresh Del Monte Produce Inc (NYSE:FDP) but similarly valued. We will take a look at Avista Corp (NYSE:AVA), Stantec Inc. (USA) (NYSE:STN), The Men’s Wearhouse, Inc. (NYSE:MW), and GrubHub Inc (NYSE:GRUB). This group of stocks’ market caps resemble FDP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AVA 7 45150 -1
STN 5 12709 1
MW 39 776046 6
GRUB 24 467061 -7

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $325 million. That figure was $45 million in FDP’s case. The Men’s Wearhouse, Inc. (NYSE:MW) is the most popular stock in this table. On the other hand Stantec Inc. (USA) (NYSE:STN) is the least popular one with only 5 bullish hedge fund positions. Fresh Del Monte Produce Inc (NYSE:FDP) 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 MW might be a better candidate to consider a long position.

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