Do Hedge Funds Love The Hain Celestial Group, Inc. (HAIN)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about The Hain Celestial Group, Inc. (NASDAQ:HAIN)?

Hedge fund interest in The Hain Celestial Group, Inc. (NASDAQ:HAIN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that HAIN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Selective Insurance Group (NASDAQ:SIGI), Quaker Chemical Corp (NYSE:KWR), and ICU Medical, Inc. (NASDAQ:ICUI) to gather more data points.

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Glenn Welling Engaged Capital

Glenn Welling of Engaged Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to check out the fresh hedge fund action encompassing The Hain Celestial Group, Inc. (NASDAQ:HAIN).

Do Hedge Funds Think HAIN Is A Good Stock To Buy Now?

At the end of March, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HAIN over the last 23 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

More specifically, Engaged Capital was the largest shareholder of The Hain Celestial Group, Inc. (NASDAQ:HAIN), with a stake worth $697.5 million reported as of the end of March. Trailing Engaged Capital was Paradice Investment Management, which amassed a stake valued at $82.2 million. Soros Fund Management, GAMCO Investors, and Greenhouse Funds were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Engaged Capital allocated the biggest weight to The Hain Celestial Group, Inc. (NASDAQ:HAIN), around 50.37% of its 13F portfolio. Paradice Investment Management is also relatively very bullish on the stock, setting aside 3.95 percent of its 13F equity portfolio to HAIN.

Judging by the fact that The Hain Celestial Group, Inc. (NASDAQ:HAIN) has experienced bearish sentiment from the smart money, we can see that there were a few fund managers who were dropping their full holdings heading into Q2. Intriguingly, Principal Global Investors’s Columbus Circle Investors cut the biggest investment of the 750 funds tracked by Insider Monkey, valued at about $24.7 million in stock. Israel Englander’s fund, Millennium Management, also dropped its stock, about $3.1 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to The Hain Celestial Group, Inc. (NASDAQ:HAIN). We will take a look at Selective Insurance Group, Inc. (NASDAQ:SIGI), Quaker Chemical Corp (NYSE:KWR), ICU Medical, Inc. (NASDAQ:ICUI), WESCO International, Inc. (NYSE:WCC), Cricut, Inc. (NASDAQ:CRCT), Medallia, Inc. (NYSE:MDLA), and Canada Goose Holdings Inc. (NYSE:GOOS). This group of stocks’ market caps resemble HAIN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SIGI 13 60120 -2
KWR 18 184447 5
ICUI 26 381958 4
WCC 28 1026615 5
CRCT 12 45232 12
MDLA 19 296296 -2
GOOS 19 207847 0
Average 19.3 314645 3.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $315 million. That figure was $934 million in HAIN’s case. WESCO International, Inc. (NYSE:WCC) is the most popular stock in this table. On the other hand Cricut, Inc. (NASDAQ:CRCT) is the least popular one with only 12 bullish hedge fund positions. The Hain Celestial Group, Inc. (NASDAQ:HAIN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HAIN is 59.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately HAIN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HAIN were disappointed as the stock returned -9.1% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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