Is Sonoco Products Company (NYSE:SON) undervalued? The best stock pickers are taking a pessimistic view. The number of long hedge fund positions dropped by 6 in recent months.
According to most shareholders, hedge funds are perceived as unimportant, old investment tools of years past. While there are more than 8000 funds in operation today, we at Insider Monkey choose to focus on the top tier of this club, around 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total capital, and by keeping an eye on their top equity investments, we have unsheathed a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, optimistic insider trading sentiment is a second way to break down the stock market universe. There are many motivations for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if investors understand what to do (learn more here).
Now, we’re going to take a peek at the key action surrounding Sonoco Products Company (NYSE:SON).
Hedge fund activity in Sonoco Products Company (NYSE:SON)
At Q1’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of -35% from the first quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully.
Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in Sonoco Products Company (NYSE:SON), worth close to $47.7 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $16.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Ken Gray and Steve Walsh’s Bryn Mawr Capital, Larry Foley and Paul Farrell’s Bronson Point Partners and Mario Gabelli’s GAMCO Investors.
Seeing as Sonoco Products Company (NYSE:SON) has experienced falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of funds that slashed their positions entirely in Q1. Interestingly, Israel Englander’s Millennium Management dumped the biggest stake of the 450+ funds we monitor, totaling an estimated $5.3 million in stock.. John Fichthorn’s fund, Dialectic Capital Management, also dumped its stock, about $1.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 6 funds in Q1.
Insider trading activity in Sonoco Products Company (NYSE:SON)
Insider buying is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time frame, Sonoco Products Company (NYSE:SON) has experienced zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Sonoco Products Company (NYSE:SON). These stocks are Packaging Corp Of America (NYSE:PKG), Owens-Illinois Inc (NYSE:OI), Silgan Holdings Inc. (NASDAQ:SLGN), Bemis Company, Inc. (NYSE:BMS), and AptarGroup, Inc. (NYSE:ATR). This group of stocks belong to the packaging & containers industry and their market caps are closest to SON’s market cap.