It’s a little-known fact that stock performance is not evenly distributed (i.e. you don’t have a 50/50 chance of picking a market-beating stock). In fact, despite the S&P 500 gaining about 5.2% between November 1, 2014 and October 30, 2015, less than 49% of the stocks in the index beat the market during that time. In contrast, the 30 stocks from the index which were the most popular among the investors that we track returned 9.5% during that time and 63% of them beat the market. This shows that while hedge funds get a lot of flak from the mainstream media for their performance, it can be rewarding to follow their moves using the right sets of data. Even then, there is never a fool proof strategy to generating returns, as even the collective wisdom of top hedge funds gets it wrong some times, as in the case of some of their top picks from the index like Micron and Anadarko. The data though, shows that following the collective wisdom of select hedge funds can be a very wise move overall.
The Hershey Company (NYSE:HSY) investors should be aware of a decrease in activity from the world’s largest hedge funds of late, with 6 of them vacating the stock during the third quarter, in aggregate. At the end of this article we will also compare The Hershey Company to other stocks including United Continental Holdings Inc (NYSE:UAL), Brown-Forman Corporation (NYSE:BF), and Incyte Corporation (NASDAQ:INCY) to get a better sense of its popularity.
At the moment there are numerous formulas stock market investors can use to grade publicly traded companies. A duo of the best formulas are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the market by a healthy margin (see the details here).
With all of this in mind, let’s take a gander at the new action surrounding The Hershey Company (NYSE:HSY).
Hedge fund activity in The Hershey Company (NYSE:HSY)
Heading into Q4, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 25% fall from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or had already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies holds the most valuable position in The Hershey Company (NYSE:HSY). Renaissance Technologies has a $231.1 million position in the stock, comprising 0.6% of its 13F portfolio. The second-largest stake is held by Winton Capital Management, managed by David Harding, which holds a $50.5 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise Steve Cohen’s Point72 Asset Management, Dmitry Balyasny’s Balyasny Asset Management, and Cliff Asness’ AQR Capital Management.