Is B&G Foods, Inc. (NYSE:BGS) a bargain? Investors who are in the know are taking a bearish view. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
In the eyes of most shareholders, hedge funds are viewed as underperforming, old financial vehicles of yesteryear. While there are more than 8000 funds trading at present, we look at the upper echelon of this group, about 450 funds. It is widely believed that this group oversees the majority of the smart money’s total capital, and by paying attention to their highest performing picks, we have discovered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as integral, optimistic insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are a variety of motivations for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if “monkeys” understand what to do (learn more here).
With all of this in mind, it’s important to take a peek at the key action surrounding B&G Foods, Inc. (NYSE:BGS).
How have hedgies been trading B&G Foods, Inc. (NYSE:BGS)?
In preparation for this quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Ric Dillon’s Diamond Hill Capital had the largest position in B&G Foods, Inc. (NYSE:BGS), worth close to $17.3 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $9.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
Seeing as B&G Foods, Inc. (NYSE:BGS) has experienced a declination in interest from the entirety of the hedge funds we track, logic holds that there is a sect of money managers that decided to sell off their entire stakes last quarter. It’s worth mentioning that Russell Lucas’s Lucas Capital Management dumped the largest stake of the “upper crust” of funds we watch, valued at close to $2.6 million in stock.. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $0.7 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading B&G Foods, Inc. (NYSE:BGS)?
Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past six months. Over the latest half-year time frame, B&G Foods, Inc. (NYSE:BGS) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to B&G Foods, Inc. (NYSE:BGS). These stocks are The Hain Celestial Group, Inc. (NASDAQ:HAIN), Gruma S.A.B. de C.V. (ADR) (NYSE:GMK), TreeHouse Foods Inc. (NYSE:THS), J&J Snack Foods Corp. (NASDAQ:JJSF), and Snyder S Lance Inc (NASDAQ:LNCE). This group of stocks are the members of the processed & packaged goods industry and their market caps match BGS’s market cap.