Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Sonoco Products Company (NYSE:SON) has seen an increase in enthusiasm from smart money lately. 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 WellCare Health Plans, Inc. (NYSE:WCG), Strategic Hotels and Resorts Inc (NYSE:BEE), and Teradyne, Inc. (NYSE:TER) to gather more data points.
Follow Sonoco Products Co (NYSE:SON)
Follow Sonoco Products Co (NYSE:SON)
In the financial world, there are a multitude of methods stock traders have at their disposal to value stocks. A duo of the most underrated methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the S&P 500 by a superb amount (see the details here).
Now, we’re going to analyze the key action encompassing Sonoco Products Company (NYSE:SON).
Hedge fund activity in Sonoco Products Company (NYSE:SON)
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 9% from the second quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Balyasny Asset Management, managed by Dmitry Balyasny, holds the number one position in Sonoco Products Company (NYSE:SON). Balyasny Asset Management has a $37.2 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which holds a $12.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism contain Israel Englander’s Millennium Management, Renaissance Technologies, and Greg Poole’s Echo Street Capital Management.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Renaissance Technologies initiated a $6.8 million position during the quarter. The other funds with new positions in the stock are Greg Poole’s Echo Street Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ray Dalio’s Bridgewater Associates.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Sonoco Products Company (NYSE:SON) but similarly valued. We will take a look at WellCare Health Plans, Inc. (NYSE:WCG), Strategic Hotels and Resorts Inc (NYSE:BEE), Teradyne, Inc. (NYSE:TER), and Syntel, Inc. (NASDAQ:SYNT). All of these stocks’ market caps match Sonoco Products Company (NYSE:SON)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WCG | 32 | 724867 | 1 |
| BEE | 31 | 466880 | 16 |
| TER | 25 | 538733 | -5 |
| SYNT | 17 | 66004 | 7 |
As you can see, these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $449 million. That figure was $116 million in Sonoco Products Company (NYSE:SON)’s case. WellCare Health Plans, Inc. (NYSE:WCG) is the most popular stock in this table. On the other hand, Syntel, Inc. (NASDAQ:SYNT) is the least popular one with only 17 bullish hedge fund positions. Sonoco Products Company (NYSE:SON) 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, WellCare Health Plans, Inc. (NYSE:WCG) might be a better candidate to consider a long position.
