The first quarter was a breeze as Powell pivoted, and China seemed eager to reach a deal with Trump. Both the S&P 500 and Russell 2000 delivered very strong gains as a result, with the Russell 2000, which is composed of smaller companies, outperforming the large-cap stocks slightly during the first quarter. Unfortunately sentiment shifted in May as this time China pivoted and Trump put more pressure on China by increasing tariffs. Hedge funds’ top 20 stock picks performed spectacularly in this volatile environment. These stocks delivered a total gain of 18.7% through May 30th, vs. a gain of 12.1% for the S&P 500 ETF. In this article we will look at how this market volatility affected the sentiment of hedge funds towards Nomad Foods Limited Ordinary Shares (NYSE:NOMD), and what that likely means for the prospects of the company and its stock.
Nomad Foods Limited Ordinary Shares (NYSE:NOMD) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. NOMD was in 42 hedge funds’ portfolios at the end of March. There were 31 hedge funds in our database with NOMD holdings at the end of the previous quarter. Our calculations also showed that NOMD isn’t among the 30 most popular stocks among hedge funds.
Today there are a multitude of indicators investors employ to analyze their holdings. A couple of the most useful indicators are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best investment managers can trounce their index-focused peers by a solid amount (see the details here).
We’re going to take a glance at the key hedge fund action regarding Nomad Foods Limited Ordinary Shares (NYSE:NOMD).
Hedge fund activity in Nomad Foods Limited Ordinary Shares (NYSE:NOMD)
Heading into the second quarter of 2019, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 35% from the previous quarter. By comparison, 29 hedge funds held shares or bullish call options in NOMD a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Nomad Foods Limited Ordinary Shares (NYSE:NOMD), which was worth $83.5 million at the end of the first quarter. On the second spot was Samlyn Capital which amassed $79.2 million worth of shares. Moreover, Citadel Investment Group, GMT Capital, and Woodson Capital Management were also bullish on Nomad Foods Limited Ordinary Shares (NYSE:NOMD), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, key hedge funds were breaking ground themselves. Laurion Capital Management, managed by Benjamin A. Smith, established the largest position in Nomad Foods Limited Ordinary Shares (NYSE:NOMD). Laurion Capital Management had $20 million invested in the company at the end of the quarter. Joseph Samuels’s Islet Management also initiated a $16.4 million position during the quarter. The other funds with new positions in the stock are Jeffrey Talpins’s Element Capital Management, Gregg Moskowitz’s Interval Partners, and Steve Cohen’s Point72 Asset Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Nomad Foods Limited Ordinary Shares (NYSE:NOMD) but similarly valued. We will take a look at Plains GP Holdings LP (NYSE:PAGP), Sterling Bancorp (NYSE:STL), United States Cellular Corporation (NYSE:USM), and Wright Medical Group N.V. (NASDAQ:WMGI). This group of stocks’ market caps are closest to NOMD’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $441 million. That figure was $519 million in NOMD’s case. Wright Medical Group N.V. (NASDAQ:WMGI) is the most popular stock in this table. On the other hand United States Cellular Corporation (NYSE:USM) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Nomad Foods Limited Ordinary Shares (NYSE:NOMD) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on NOMD as the stock returned 2.8% during the same period 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.
Disclosure: None. This article was originally published at Insider Monkey.