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. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded The Simply Good Foods Company (NASDAQ:SMPL) and determine whether the smart money was really smart about this stock.
The Simply Good Foods Company (NASDAQ:SMPL) was in 26 hedge funds’ portfolios at the end of June. The all time high for this statistics is 34. SMPL has experienced an increase in hedge fund interest recently. There were 19 hedge funds in our database with SMPL holdings at the end of March. Our calculations also showed that SMPL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are assumed to be slow, outdated investment vehicles of the past. While there are over 8000 funds trading today, We hone in on the moguls of this club, about 850 funds. These hedge fund managers handle bulk of the hedge fund industry’s total asset base, and by keeping track of their unrivaled picks, Insider Monkey has unsheathed a number of investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
James Dinan of York Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind let’s go over the fresh hedge fund action surrounding The Simply Good Foods Company (NASDAQ:SMPL).
How are hedge funds trading The Simply Good Foods Company (NASDAQ:SMPL)?
At second quarter’s end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 37% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in SMPL a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, James Dinan’s York Capital Management has the number one position in The Simply Good Foods Company (NASDAQ:SMPL), worth close to $43.2 million, accounting for 2.9% of its total 13F portfolio. The second most bullish fund manager is Scopus Asset Management, led by Alexander Mitchell, holding a $12.1 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish comprise Israel Englander’s Millennium Management, Glenn W. Welling’s Engaged Capital and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position York Capital Management allocated the biggest weight to The Simply Good Foods Company (NASDAQ:SMPL), around 2.85% of its 13F portfolio. Marathon Partners is also relatively very bullish on the stock, earmarking 2.17 percent of its 13F equity portfolio to SMPL.
Now, some big names have been driving this bullishness. York Capital Management, managed by James Dinan, created the most valuable position in The Simply Good Foods Company (NASDAQ:SMPL). York Capital Management had $43.2 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $12.1 million position during the quarter. The other funds with new positions in the stock are Glenn W. Welling’s Engaged Capital, Philip Hempleman’s Ardsley Partners, and Malcolm Levine’s Dendur Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The Simply Good Foods Company (NASDAQ:SMPL) but similarly valued. These stocks are SJW Corp. (NYSE:SJW), Liberty Latin America Ltd. (NASDAQ:LILA), Cavco Industries, Inc. (NASDAQ:CVCO), AMTD International Inc. (NYSE:HKIB), PRA Group, Inc. (NASDAQ:PRAA), Dana Incorporated (NYSE:DAN), and Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA). This group of stocks’ market values resemble SMPL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SJW | 11 | 84916 | 1 |
| LILA | 15 | 102005 | 3 |
| CVCO | 23 | 170774 | 3 |
| HKIB | 1 | 14188 | 0 |
| PRAA | 13 | 70871 | -1 |
| DAN | 25 | 185695 | -3 |
| IBA | 3 | 30135 | 0 |
| Average | 13 | 94083 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $139 million in SMPL’s case. Dana Incorporated (NYSE:DAN) is the most popular stock in this table. On the other hand AMTD International Inc. (NYSE:HKIB) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks The Simply Good Foods Company (NASDAQ:SMPL) is more popular among hedge funds. Our overall hedge fund sentiment score for SMPL is 82.9. 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 21.3% in 2020 through September 25th but still managed to beat the market by 17.7 percentage points. Hedge funds were also right about betting on SMPL as the stock returned 17.2% since the end of June and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
