Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of United Natural Foods, Inc. (NASDAQ:UNFI).
United Natural Foods, Inc. (NASDAQ:UNFI) was in 16 hedge funds’ portfolios at the end of September. UNFI investors should be aware of an increase in support from the world’s most elite money managers of late. There were 15 hedge funds in our database with UNFI positions at the end of the previous quarter. At the end of this article we will also compare UNFI to other stocks including Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), Tech Data Corp (NASDAQ:TECD), and AMAYA INC (NASDAQ:AYA) to get a better sense of its popularity.
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Now, we’re going to take a look at the new action regarding United Natural Foods, Inc. (NASDAQ:UNFI).
What have hedge funds been doing with United Natural Foods, Inc. (NASDAQ:UNFI)?
Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Sheffield Asset Management, managed by Craig C. Albert, holds the largest position in United Natural Foods, Inc. (NASDAQ:UNFI). Sheffield Asset Management has a $39.8 million position in the stock, comprising 5.8% of its 13F portfolio. The second most bullish fund manager is Fisher Asset Management, managed by Ken Fisher, which holds a $33.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism include Richard Mashaal’s Rima Senvest Management, Greg Poole’s Echo Street Capital Management and Ian Simm’s Impax Asset Management.
Now, key hedge funds have jumped into United Natural Foods, Inc. (NASDAQ:UNFI) headfirst. Sheffield Asset Management, managed by Craig C. Albert, created the largest position in United Natural Foods, Inc. (NASDAQ:UNFI). Sheffield Asset Management had $39.8 million invested in the company at the end of the quarter. Richard Mashaal’s Rima Senvest Management also made a $32 million investment in the stock during the quarter. The other funds with brand new UNFI positions are Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital, Mark Coe’s Coe Capital Management, and Sahm Adrangi’s Kerrisdale Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as United Natural Foods, Inc. (NASDAQ:UNFI) but similarly valued. These stocks are Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), Tech Data Corp (NASDAQ:TECD), AMAYA INC (NASDAQ:AYA), and Healthcare Services Group, Inc. (NASDAQ:HCSG). This group of stocks’ market caps are closest to UNFI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBGI | 31 | 529314 | -1 |
| TECD | 25 | 195273 | 5 |
| AYA | 18 | 663333 | -1 |
| HCSG | 5 | 22638 | -2 |
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $353 million. That figure was $201 million in UNFI’s case. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) is the most popular stock in this table. On the other hand Healthcare Services Group, Inc. (NASDAQ:HCSG) is the least popular one with only 5 bullish hedge fund positions. United Natural Foods, Inc. (NASDAQ:UNFI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SBGI might be a better candidate to consider a long position.
