Tyson Foods, Inc. (NYSE:TSN) shareholders have witnessed a decrease in enthusiasm from smart money lately.
If you’d ask most shareholders, hedge funds are seen as unimportant, old investment vehicles of years past. While there are more than 8000 funds in operation at present, we at Insider Monkey hone in on the top tier of this group, about 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total capital, and by watching their highest performing stock picks, we have formulated a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as integral, bullish insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are lots of reasons for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if “monkeys” know where to look (learn more here).
With all of this in mind, let’s take a gander at the recent action regarding Tyson Foods, Inc. (NYSE:TSN).
What does the smart money think about Tyson Foods, Inc. (NYSE:TSN)?
At Q1’s end, a total of 25 of the hedge funds we track held long positions in this stock, a change of -7% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital had the biggest position in Tyson Foods, Inc. (NYSE:TSN), worth close to $130 million, accounting for 1% of its total 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $104.9 million position; 0.4% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Michael Messner’s Seminole Capital (Investment Mgmt), Steven Cohen’s SAC Capital Advisors and Sean Cullinan’s Point State Capital.
Because Tyson Foods, Inc. (NYSE:TSN) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of hedgies that elected to cut their positions entirely heading into Q2. It’s worth mentioning that Jacob Doft’s Highline Capital Management cut the largest investment of all the hedgies we monitor, valued at about $38.9 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund sold off about $28.6 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds heading into Q2.
Insider trading activity in Tyson Foods, Inc. (NYSE:TSN)
Insider buying is most useful when the company in focus has seen transactions within the past half-year. Over the last half-year time frame, Tyson Foods, Inc. (NYSE:TSN) has seen 3 unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Tyson Foods, Inc. (NYSE:TSN). These stocks are Seaboard Corporation (NYSEAMEX:SEB), Smithfield Foods, Inc. (NYSE:SFD), BRF Brasil Foods SA (ADR) (NYSE:BRFS), Leucadia National Corp. (NYSE:LUK), and Hormel Foods Corporation (NYSE:HRL). This group of stocks are in the meat products industry and their market caps match TSN’s market cap.