Four stocks from the retail, finance and technology segments are rallying on Wednesday, amid strong moves in the main indices. Let’s take a look at the factors which have led to the performance of these companies and see what is the sentiment toward them among the funds from our database.
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Milwaukee-based supermarket operator Roundy’s Inc. (NYSE:RNDY) made a big leap on Wednesday, with a 58.93% gain since the opening bell. The positive investor sentiment followed after Cincinnati-based Kroger Co. (NYSE:KR) announced plans to acquire Roundy’s Inc. (NYSE:RNDY) in an $800 million deal, including debt, or $3.60 per share. To execute the agreement, Kroger Co. (NYSE:KR) will launch a tender offer for all of the outstanding shares of Roundy’s common stock. Shares of Roundy’s Inc. (NYSE:RNDY) common stock which are not acquired will be sold to Kroger in a subsequent merger, the companies said in a joint statement. According to our database, 33 out of 730 funds in our database held 2.80% of the Roundy’s Inc. (NYSE:RNDY)’s outstanding stock at the end of June. Among them, billionaire quant Jim Simons’ Renaissance Technologies, reported holding 1.74 million shares of Roundy’s as of the end of June; Renaissance more than doubled the stake over the quarter.
On the following page we are going to discuss the developments behind the appreciation of Amira Nature Foods Ltd. (NYSE:ANFI), Mizuho Financial Group Inc. (NYSE:MFG), and Alarm.Com Holdings Inc. (NASDAQ:ALRM).