The FMCG (or fast moving consumer goods) industry, also known as the packaged goods or consumer non-durables sector, is largely considered a sector that ebbs and flows with consumer confidence and the overall strength of the economy. While some companies operating in the sector, like Procter & Gamble Co (NYSE:PG), sell items considered essentials, you’ll see from the following list that many of the top-ranked companies rely on discretionary spending, which rises with the strength of the economy. In this article we’ll take a look at the top five FMCG stocks held by the elite hedge funds tracked by Insider Monkey, which should put them on the radars of every investor interested in the sector.
Whether elite hedge funds collectively like a stock or not is an important metric to consider, as these large investors show a great level of skill and expertise when it comes to picking stocks. Over the last few years equity hedge funds have trailed the market by a large margin, but that’s mostly due to their hedging and short positions, which perform poorly in a bull market. Their long positions performed far better, especially their small-cap picks, which have the potential to beat the market by 95 basis points per month on average, as our backtests showed. Our small-cap strategy involves imitating a portfolio of the 15 most popular small-cap picks among hedge funds and it has returned 118% since August 2012, beating the S&P 500 ETF (SPY) by over 60 percentage points (read more details here).
- Dollar Tree, Inc. (NASDAQ:DLTR)
- Investors with Long Positions (as of June 30): 60
- Aggregate Value of Investors’ Holdings (as of June 30): $3.31 Billion
- Percentage of Shares Owned by Investors: 20.30%
Interest in Dollar Tree, Inc. (NASDAQ:DLTR) among the investors we track declined slightly in the second quarter, just ahead of the completion of its acquisition of Family Dollar. However, those elite funds still held 20.30% of the discount retailer’s common stock, the highest percentage on this list, though that will likely decline further in the third quarter as event-driven funds exit the stock with its merger now completed. Dollar Tree, Inc. (NASDAQ:DLTR)’s stock took a big hit on September 1 when it released its first quarterly earnings report post-merger, which disappointed investors. Costs have risen and margins have declined as it continues to work to integrate its acquisition into its operations. Charles Akre’s Akre Capital Management and Panayotis Takis Sparaggis’ Alkeon Capital Management were the top two shareholders of Dollar Tree in our database, holding 3.55 million shares and 3.53 million shares respectively.