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Hedge Funds Are In Wait And See Mode With SpartanNash Company (SPTN)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of SpartanNash Company (NASDAQ:SPTN).

Hedge fund interest in SpartanNash Company (NASDAQ:SPTN) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare SPTN to other stocks including ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), TPI Composites, Inc. (NASDAQ:TPIC), and ARMOUR Residential REIT, Inc. (NYSE:ARR) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Today there are several formulas investors put to use to assess their stock investments. A pair of the less known formulas are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the S&P 500 by a healthy amount (see the details here).

Fred DiSanto Ancora Advisors

Fred DiSanto of Ancora Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s view the fresh hedge fund action regarding SpartanNash Company (NASDAQ:SPTN).

What have hedge funds been doing with SpartanNash Company (NASDAQ:SPTN)?

Heading into the second quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SPTN over the last 18 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Is SPTN A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the largest position in SpartanNash Company (NASDAQ:SPTN), worth close to $10.3 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $6.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions contain John Overdeck and David Siegel’s Two Sigma Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to SpartanNash Company (NASDAQ:SPTN), around 0.3% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, earmarking 0.08 percent of its 13F equity portfolio to SPTN.

Due to the fact that SpartanNash Company (NASDAQ:SPTN) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies that slashed their positions entirely by the end of the first quarter. At the top of the heap, David Harding’s Winton Capital Management dumped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $0.9 million in stock. Philippe Laffont’s fund, Coatue Management, also cut its stock, about $0.5 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as SpartanNash Company (NASDAQ:SPTN) but similarly valued. We will take a look at ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), TPI Composites, Inc. (NASDAQ:TPIC), ARMOUR Residential REIT, Inc. (NYSE:ARR), and Niu Technologies (NASDAQ:NIU). All of these stocks’ market caps match SPTN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZIOP 13 104502 -1
TPIC 13 47510 -7
ARR 10 15497 -1
NIU 5 31244 0
Average 10.25 49688 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $29 million in SPTN’s case. ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) is the most popular stock in this table. On the other hand Niu Technologies (NASDAQ:NIU) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks SpartanNash Company (NASDAQ:SPTN) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on SPTN as the stock returned 45.7% so far in Q2 (through June 25th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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