We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards J&J Snack Foods Corp. (NASDAQ:JJSF), and what that likely means for the prospects of the company and its stock.
J&J Snack Foods Corp. (NASDAQ:JJSF) was in 10 hedge funds’ portfolios at the end of September. JJSF has seen an increase in enthusiasm from smart money in recent months. There were 9 hedge funds in our database with JJSF 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 Boyd Gaming Corporation (NYSE:BYD), Healthequity Inc (NASDAQ:HQY), and Watts Water Technologies Inc (NYSE:WTS) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Hedge fund activity in J&J Snack Foods Corp. (NASDAQ:JJSF)
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 11% from the second quarter of 2016. By comparison, 7 hedge funds held shares or bullish call options in JJSF heading into this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world, holds the number one position in J&J Snack Foods Corp. (NASDAQ:JJSF) which has a $38.1 million position in the stock. Coming in second is Ken Fisher of Fisher Asset Management which holds a $6.5 million position. Remaining peers that are bullish consist of Mario Gabelli’s GAMCO Investors, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’ AQR Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.