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Hedge Funds Are Buying Jarden Corp (JAH)

Is Jarden Corp (NYSE:JAH) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.

Is Jarden Corp (NYSE:JAH) a buy here? Investors who are in the know are in an optimistic mood. The number of long hedge fund positions went up by 9 in recent months. Jarden Corp (NYSE:JAH) was in 42 hedge funds’ portfolios at the end of September. There were 33 hedge funds in our database with Jarden Corp (NYSE:JAH) holdings at the end of the previous quarter. 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 Ameren Corp (NYSE:AEE), Alcatel Lucent SA (ADR) (NYSE:ALU), and Martin Marietta Materials, Inc. (NYSE:MLM) to gather more data points.

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In the eyes of most stock holders, hedge funds are seen as underperforming, outdated investment vehicles of the past. While there are greater than 8000 funds in operation today, our experts choose to focus on the elite of this club, approximately 700 funds. It is estimated that this group of investors controls the majority of all hedge funds’ total capital, and by observing their first-class stock picks, Insider Monkey has formulated various investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, let’s review the key action encompassing Jarden Corp (NYSE:JAH).

How are hedge funds trading Jarden Corp (NYSE:JAH)?

At the end of the third quarter, a total of 42 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 27% from the second quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund and institutional investor database, Larry Robbins’ Glenview Capital has the number one position in Jarden Corp (NYSE:JAH), worth close to $197 million, comprising 1% of its total 13F portfolio. The second largest stake is held by Murray Stahl of Horizon Asset Management, with a $193.4 million position; 3.5% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish comprise Ken Griffin’s Citadel Investment Group, Doug Silverman and Alexander Klabin’s Senator Investment Group, and Ken Fisher’s Fisher Asset Management.

As one would reasonably expect, key money managers have jumped into Jarden Corp (NYSE:JAH) headfirst. Scopus Asset Management, managed by Alexander Mitchell, created the largest position in Jarden Corp (NYSE:JAH). Scopus Asset Management had $41.5 million invested in the company at the end of the quarter. Ben Gambill’s Tiger Eye Capital also made a $21.2 million investment in the stock during the quarter. The following funds were also among the new Jarden Corp (NYSE:JAH) investors: Clifford Fox’s Columbus Circle Investors, James Dondero’s Highland Capital Management, and Min Htoo and Jordan Teramo’s Anandar Capital Management.

Let’s check out hedge fund activity in other stocks similar to Jarden Corp (NYSE:JAH). We will take a look at Ameren Corp (NYSE:AEE), Alcatel Lucent SA (ADR) (NYSE:ALU), Martin Marietta Materials, Inc. (NYSE:MLM), and Banco de Chile (ADR) (NYSE:BCH). This group of stocks’ market caps is closest to Jarden Corp (NYSE:JAH)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AEE 18 459329 0
ALU 11 100794 1
MLM 47 1886971 2
BCH 4 28046 -1

As you can see, these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $619 million. That figure was $1.46 billion in Jarden Corp (NYSE:JAH)’s case. Martin Marietta Materials, Inc. (NYSE:MLM) is the most popular stock in this table. On the other hand, Banco de Chile (ADR) (NYSE:BCH) is the least popular one with only 4 bullish hedge fund positions. Jarden Corp (NYSE:JAH) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Martin Marietta Materials, Inc. (NYSE:MLM) might be a better candidate to consider a long position.

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