Is Tyson Foods, Inc. (NYSE:TSN) a marvelous investment right now? The smart money is in an optimistic mood. The number of long hedge fund positions inched up by 1 in recent months.
In the eyes of most investors, hedge funds are seen as unimportant, old financial tools of yesteryear. While there are more than 8000 funds in operation today, we choose to focus on the upper echelon of this club, about 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total capital, and by paying attention to their top investments, we have spotted a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, bullish insider trading sentiment is another way to parse down the world of equities. Obviously, there are lots of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
With all of this in mind, it’s important to take a peek at the latest action regarding Tyson Foods, Inc. (NYSE:TSN).
How have hedgies been trading Tyson Foods, Inc. (NYSE:TSN)?
Heading into 2013, a total of 25 of the hedge funds we track held long positions in this stock, a change of 4% from the previous quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, AQR Capital Management, managed by Cliff Asness, holds the biggest position in Tyson Foods, Inc. (NYSE:TSN). AQR Capital Management has a $82.5 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Highline Capital Management, managed by Jacob Doft, which held a $38.9 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, David Harding’s Winton Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Seminole Capital (Investment Mgmt), managed by Michael Messner, initiated the largest position in Tyson Foods, Inc. (NYSE:TSN). Seminole Capital (Investment Mgmt) had 7.9 million invested in the company at the end of the quarter. Wayne Cooperman’s Cobalt Capital Management also initiated a $7.8 million position during the quarter. The other funds with brand new TSN positions are Alexander Mitchell’s Scopus Asset Management, Neil Chriss’s Hutchin Hill Capital, and Joel Greenblatt’s Gotham Asset Management.
How have insiders been trading Tyson Foods, Inc. (NYSE:TSN)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time frame, Tyson Foods, Inc. (NYSE:TSN) has seen 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Tyson Foods, Inc. (NYSE:TSN). These stocks are Seaboard Corporation (NYSEAMEX:SEB), Smithfield Foods, Inc. (NYSE:SFD), BRF Brasil Foods SA (ADR) (NYSE:BRFS), Leucadia National Corp. (NYSE:LUK), and Hormel Foods Corporation (NYSE:HRL). This group of stocks belong to the meat products industry and their market caps are similar to TSN’s market cap.