You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Hershey Co (NYSE:HSY) a buy here? Investors who are in the know are getting more optimistic. The number of long hedge fund positions rose by 6 lately. At the end of this article we will also compare HSY to other stocks including Fiserv, Inc. (NASDAQ:FISV), Fidelity National Information Services (NYSE:FIS), and Zimmer Biomet Holdings Inc (NYSE:ZBH) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, let’s check out the fresh action regarding Hershey Co (NYSE:HSY).
What does the smart money think about Hershey Co (NYSE:HSY)?
At Q3’s end, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Hershey Co (NYSE:HSY). Citadel Investment Group has a $108.8 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $106.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain and Benjamin A. Smith’s Laurion Capital Management, and D. E. Shaw’s D E Shaw.
Consequently, key money managers were breaking ground themselves. Highfields Capital Management, managed by Jonathon Jacobson, created the most valuable position in Hershey Co (NYSE:HSY). Highfields Capital Management had $95.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $78.9 million position during the quarter. The other funds with brand new HSY positions are Anand Parekh’s Alyeska Investment Group, Dmitry Balyasny’s Balyasny Asset Management, and Bruce Kovner’s Caxton Associates LP.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hershey Co (NYSE:HSY) but similarly valued. We will take a look at Fiserv, Inc. (NASDAQ:FISV), Fidelity National Information Services (NYSE:FIS), Zimmer Biomet Holdings Inc (NYSE:ZBH), and Valero Energy Corporation (NYSE:VLO). This group of stocks’ market caps resemble HSY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 40.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.41 billion. That figure was $714 million in HSY’s case. Fidelity National Information Services (NYSE:FIS) is the most popular stock in this table. On the other hand Fiserv, Inc. (NASDAQ:FISV) is the least popular one with only 27 bullish hedge fund positions. Hershey Co (NYSE:HSY) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FIS might be a better candidate to consider a long position.