Over the past 12 months the Discount Stores industry has posted average gains of 14.12%. Smart money managers have been able to capture a fair chunk of these gains through their astute stock picks in the industry. In order to give retail investors a chance to benefit from the industry’s gains we have compiled a list of five companies that have gained the most traction among the more than 700 hedge funds that we track at Insider Monkey.
But why do we track hedge fund activity? From one point of view we can argue that hedge funds are consistently underperforming when it comes to net returns over the last three years, when compared to the S&P 500. But that doesn’t mean that we should completely neglect their activity. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. In our back-tests covering the 1999-2012 period hedge funds’ top small-cap stocks edged the S&P 500 index by double digits annually. The 15 most popular small-cap stock picks among hedge funds also bested passive index funds by around 60 percentage points over the 36 month period beginning from September 2012 (read the details here).
- The Fresh Market Inc (NASDAQ:TFM)
– Investors with Long Positions (as of June 30): 18
– Aggregate Value of Investors’ Holdings (as of June 30): $219.30 Million
The hedge fund concentration in the company at the end of June amounted to 14.10% of The Fresh Market’s outstanding shares. During the second quarter the total number of these funds holding the $1.12 billion specialty grocery retailer in their portfolios increased by four, while the total value of their investment slipped by $23.85 million. The slide came on the heels of a 21% drop in The Fresh Market Inc (NASDAQ:TFM)’s stock price during the same period however, so share ownership was increased during this time. Matt Sirovich and Jeremy Mindich‘s Scopia Capital was the largest stockholder of The Fresh Market Inc (NASDAQ:TFM) within our database as of June 30, but the fund significantly slashed its holding to just 246,600 shares in early September. The stock is down by 4.4% over the last year.