In the financial world, there are dozens of indicators shareholders can use to monitor publicly traded companies. Two of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can trounce the broader indices by a healthy margin (see just how much).
Just as useful, positive insider trading sentiment is another way to analyze the investments you’re interested in. As the old adage goes: there are a variety of motivations for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would buy. Several empirical studies have demonstrated the useful potential of this strategy if “monkeys” understand what to do (learn more here).
Keeping this in mind, it’s important to analyze the latest info surrounding The J.M. Smucker Company (NYSE:SJM).
Hedge fund activity in The J.M. Smucker Company (NYSE:SJM)
At Q2′s end, a total of 20 of the hedge funds we track were long in this stock, a change of -9% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully.
When using filings from the hedgies we track, John W. Rogers’s Ariel Investments had the most valuable position in The J.M. Smucker Company (NYSE:SJM), worth close to $60.6 million, comprising 1% of its total 13F portfolio. The second largest stake is held by David Harding of Winton Capital Management, with a $60.4 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other peers that are bullish include Bernard Horn’s Polaris Capital Management, Cliff Asness’s AQR Capital Management and Jim Simons’s Renaissance Technologies.
Because The J.M. Smucker Company (NYSE:SJM) has faced dropping sentiment from the entirety of the hedge funds we track, we can see that there exists a select few funds that decided to sell off their full holdings at the end of the second quarter. Intriguingly, Chuck Royce’s Royce & Associates sold off the biggest position of the 450+ funds we watch, totaling about $32.1 million in stock, and Phill Gross and Robert Atchinson of Adage Capital Management was right behind this move, as the fund dumped about $15.1 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds at the end of the second quarter.
What have insiders been doing with The J.M. Smucker Company (NYSE:SJM)?
Insider buying is most useful when the company in question has experienced transactions within the past six months. Over the last half-year time frame, The J.M. Smucker Company (NYSE:SJM) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to The J.M. Smucker Company (NYSE:SJM). These stocks are Mead Johnson Nutrition CO (NYSE:MJN), ConAgra Foods, Inc. (NYSE:CAG), Campbell Soup Company (NYSE:CPB), Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), and McCormick & Company, Incorporated (NYSE:MKC). All of these stocks are in the processed & packaged goods industry and their market caps are closest to SJM’s market cap.