Hedge Funds Are Dumping Tupperware Brands Corporation (TUP)

We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds’ top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Tupperware Brands Corporation (NYSE:TUP).

Is Tupperware Brands Corporation (NYSE:TUP) worth your attention right now? Hedge funds are selling. The number of bullish hedge fund bets fell by 6 lately. Our calculations also showed that TUP isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Jeffrey Bronchick - Cove Street Capital

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a peek at the fresh hedge fund action encompassing Tupperware Brands Corporation (NYSE:TUP).

What have hedge funds been doing with Tupperware Brands Corporation (NYSE:TUP)?

Heading into the third quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -26% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in TUP a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

No of Hedge Funds with TUP Positions

The largest stake in Tupperware Brands Corporation (NYSE:TUP) was held by AQR Capital Management, which reported holding $40 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $29.7 million position. Other investors bullish on the company included Citadel Investment Group, Cove Street Capital, and D E Shaw.

Because Tupperware Brands Corporation (NYSE:TUP) has experienced falling interest from the smart money, we can see that there were a few fund managers that elected to cut their full holdings last quarter. Intriguingly, Noam Gottesman’s GLG Partners dumped the biggest position of all the hedgies watched by Insider Monkey, totaling an estimated $2.5 million in stock. Anthony Scaramucci’s fund, Skybridge Capital, also cut its stock, about $2.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds last quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Tupperware Brands Corporation (NYSE:TUP) but similarly valued. We will take a look at Unitil Corporation (NYSE:UTL), JinkoSolar Holding Co., Ltd. (NYSE:JKS), BJ’s Restaurants, Inc. (NASDAQ:BJRI), and Associated Capital Group, Inc. (NYSE:AC). All of these stocks’ market caps match TUP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UTL 9 85550 -1
JKS 8 18193 2
BJRI 14 124883 -5
AC 6 66735 -1
Average 9.25 73840 -1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $135 million in TUP’s case. BJ’s Restaurants, Inc. (NASDAQ:BJRI) is the most popular stock in this table. On the other hand Associated Capital Group, Inc. (NYSE:AC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Tupperware Brands Corporation (NYSE:TUP) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately TUP wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TUP were disappointed as the stock returned -15.2% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.

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