At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Middleby Corporation (NASDAQ:MIDD) was in 20 hedge funds’ portfolios at the end of September. Middleby Corporation (NASDAQ:MIDD) has experienced a decrease in support from the world’s most elite money managers in recent months. There were 23 hedge funds in our database with Middleby Corporation (NASDAQ:MIDD) holdings 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 UGI Corp (NYSE:UGI), Reinsurance Group of America Inc (NYSE:RGA), and Qiagen NV (NASDAQ:QGEN) to gather more data points.
To the average investor, there are several methods investors can use to assess their stock investments. A duo of the most under-the-radar methods are hedge fund and insider trading sentiment. our experts have shown that, historically, those who follow the top picks of the top fund managers can outpace the S&P 500 by a healthy margin (see the details here).
Keeping this in mind, let’s take a look at the key action encompassing The Middleby Corporation (NASDAQ:MIDD).
Hedge fund activity in The Middleby Corporation (NASDAQ:MIDD)
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey were bullish in this stock, a decrease of 13% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, Daniel S. Och’s OZ Management had the most valuable position in The Middleby Corporation (NASDAQ:MIDD), worth close to $261.5 million, comprising 0.9% of its total 13F portfolio. Coming in second is Alan Fournier of Pennant Capital Management, with a $192.9 million position; the fund has 4.1% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Clifford Fox’s Columbus Circle Investors, Matthew A. Weatherbie’s Weatherbie Capital and Mark Broach’s Manatuck Hill Partners.
Since The Middleby Corporation (NASDAQ:MIDD) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that elected to cut their full holdings last quarter. Interestingly, Chuck Royce’s mutual fund, Royce & Associates, cut the biggest stake of all the hedgies followed by Insider Monkey, totaling an estimated $10 million in stock. Renaissance Technologies also dumped its stock, about $9.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The Middleby Corporation (NASDAQ:MIDD) but similarly valued. These stocks are UGI Corp (NYSE:UGI), Reinsurance Group of America Inc (NYSE:RGA), Qiagen NV (NASDAQ:QGEN), and Kilroy Realty Corp (NYSE:KRC). This group of stocks’ market values are closest to Middleby Corporation (NASDAQ:MIDD)’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $204 million. On the other hand, hedge funds held $567 million worth of Middleby Corporation (NASDAQ:MIDD)’s stock and it was more popular at the end of September. This does not imply that Middleby’s stock is certainly poised to explode, but it should narrow down your search and should be worth a further analysis.