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Is The J.M. Smucker Company (NYSE:SJM) Going to Burn These Hedge Funds?

Earnings Analysis: J.M. Smucker Co. (NYSE:SJM)The J.M. Smucker Company (NYSE:SJM) was in 16 hedge funds’ portfolio at the end of the fourth quarter of 2012. SJM has seen a decrease in activity from the world’s largest hedge funds in recent months. There were 22 hedge funds in our database with SJM holdings at the end of the previous quarter.

In the financial world, there are tons of metrics market participants can use to track their holdings. A couple of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can outclass their index-focused peers by a significant margin (see just how much).

Equally as beneficial, optimistic insider trading activity is another way to break down the stock market universe. There are plenty of incentives for a bullish insider to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if you know where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the recent action regarding The J.M. Smucker Company (NYSE:SJM).

How have hedgies been trading The J.M. Smucker Company (NYSE:SJM)?

In preparation for this year, a total of 16 of the hedge funds we track were bullish in this stock, a change of -27% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes considerably.

According to our comprehensive database, John W. Rogers’s Ariel Investments had the biggest position in The J.M. Smucker Company (NYSE:SJM), worth close to $53 million, comprising 1.1% of its total 13F portfolio. On Ariel Investments’s heels is Polaris Capital Management, managed by Bernard Horn, which held a $44 million position; the fund has 3.2% of its 13F portfolio invested in the stock. Some other peers that are bullish include Chuck Royce’s Royce & Associates, Cliff Asness’s AQR Capital Management and Amy Minella’s Cardinal Capital.

Since The J.M. Smucker Company (NYSE:SJM) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of funds that elected to cut their entire stakes last quarter. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the biggest position of all the hedgies we watch, worth an estimated $25 million in stock.. Clint Carlson’s fund, Carlson Capital, also cut its stock, about $9 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 6 funds last quarter.

What have insiders been doing with The J.M. Smucker Company (NYSE:SJM)?

Insider buying is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, The J.M. Smucker Company (NYSE:SJM) has seen zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

With the returns shown by the aforementioned studies, everyday investors must always watch hedge fund and insider trading activity, and The J.M. Smucker Company (NYSE:SJM) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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