Hormel Foods Corporation (NYSE:HRL) investors should pay attention to a decrease in support from the world's most elite money managers of late.
In today’s marketplace, there are a multitude of indicators shareholders can use to analyze the equity markets. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outperform the market by a superb margin (see just how much).
Equally as beneficial, bullish insider trading activity is a second way to parse down the world of equities. Just as you'd expect, there are lots of reasons for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this tactic if investors know where to look (learn more here).
With these "truths" under our belt, it's important to take a peek at the recent action surrounding Hormel Foods Corporation (NYSE:HRL).
At Q1's end, a total of 8 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Chuck Royce's Royce & Associates had the largest position in Hormel Foods Corporation (NYSE:HRL), worth close to $26.9 million, accounting for 0.1% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $25.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that hold long positions include Ken Griffin's Citadel Investment Group, David Harding's Winton Capital Management and Tom Russo's Gardner Russo & Gardner.
Seeing as Hormel Foods Corporation (NYSE:HRL) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there exists a select few hedgies that slashed their positions entirely last quarter. Intriguingly, Joel Greenblatt's Gotham Asset Management said goodbye to the largest position of the "upper crust" of funds we monitor, totaling about $1.4 million in stock.. Matthew Hulsizer's fund, PEAK6 Capital Management, also dropped its stock, about $0.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider buying is particularly usable when the company we're looking at has experienced transactions within the past six months. Over the last six-month time frame, Hormel Foods Corporation (NYSE:HRL) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to Hormel Foods Corporation (NYSE:HRL). These stocks are Seaboard Corporation (NYSEAMEX:SEB), Smithfield Foods, Inc. (NYSE:SFD), BRF Brasil Foods SA (ADR) (NYSE:BRFS), Leucadia National Corp. (NYSE:LUK), and Tyson Foods, Inc. (NYSE:TSN). This group of stocks are in the meat products industry and their market caps are closest to HRL's market cap.