A Hedge Fund Horde Was Piling Into General Mills, Inc. (GIS)

Is General Mills, Inc. (NYSE:GIS) the right pick for your portfolio? Hedge funds are taking a bullish view. The number of long hedge fund positions went up by 5 recently. Our calculations also showed that GIS isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Jeffrey Talpins Element Capital

Let’s analyze the key hedge fund action encompassing General Mills, Inc. (NYSE:GIS).

What does the smart money think about General Mills, Inc. (NYSE:GIS)?

At Q4’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GIS over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


Among these funds, Alkeon Capital Management held the most valuable stake in General Mills, Inc. (NYSE:GIS), which was worth $58.2 million at the end of the third quarter. On the second spot was GAMCO Investors which amassed $55.5 million worth of shares. Moreover, Element Capital Management, Renaissance Technologies, and Citadel Investment Group were also bullish on General Mills, Inc. (NYSE:GIS), allocating a large percentage of their portfolios to this stock.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Element Capital Management, managed by Jeffrey Talpins, established the most outsized position in General Mills, Inc. (NYSE:GIS). Element Capital Management had $54.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $42.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, John Brennan’s Sirios Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s now review hedge fund activity in other stocks similar to General Mills, Inc. (NYSE:GIS). These stocks are Square, Inc. (NYSE:SQ), Wipro Limited (NYSE:WIT), IQVIA Holdings, Inc. (NYSE:IQV), and Archer Daniels Midland Company (NYSE:ADM). This group of stocks’ market values are closest to GIS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SQ 35 840921 12
WIT 10 78086 2
IQV 49 4512859 1
ADM 29 605103 -3
Average 30.75 1509242 3

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.75 hedge funds with bullish positions and the average amount invested in these stocks was $1509 million. That figure was $405 million in GIS’s case. IQVIA Holdings, Inc. (NYSE:IQV) is the most popular stock in this table. On the other hand Wipro Limited (NYSE:WIT) is the least popular one with only 10 bullish hedge fund positions. General Mills, Inc. (NYSE:GIS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on GIS as the stock returned 23.5% and outperformed the market as well.

Disclosure: None. This article was originally published at Insider Monkey.