While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Fresh Del Monte Produce Inc (NYSE:FDP).
Is Fresh Del Monte Produce Inc (NYSE:FDP) a good investment today? Investors who are in the know were getting more optimistic. The number of long hedge fund bets improved by 1 lately. Fresh Del Monte Produce Inc (NYSE:FDP) was in 12 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 18. Our calculations also showed that FDP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are many indicators stock market investors have at their disposal to value their holdings. Some of the most useful indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top money managers can trounce the broader indices by a superb margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s review the latest hedge fund action surrounding Fresh Del Monte Produce Inc (NYSE:FDP).
Do Hedge Funds Think FDP Is A Good Stock To Buy Now?
At the end of September, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. By comparison, 11 hedge funds held shares or bullish call options in FDP a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the most valuable position in Fresh Del Monte Produce Inc (NYSE:FDP). Renaissance Technologies has a $9.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $8.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish include Cliff Asness’s AQR Capital Management, Ali Motamed’s Invenomic Capital Management and Mika Toikka’s AlphaCrest Capital Management. In terms of the portfolio weights assigned to each position Invenomic Capital Management allocated the biggest weight to Fresh Del Monte Produce Inc (NYSE:FDP), around 0.69% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, designating 0.09 percent of its 13F equity portfolio to FDP.
As industrywide interest jumped, key hedge funds were breaking ground themselves. AlphaCrest Capital Management, managed by Mika Toikka, initiated the most valuable position in Fresh Del Monte Produce Inc (NYSE:FDP). AlphaCrest Capital Management had $0.8 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks similar to Fresh Del Monte Produce Inc (NYSE:FDP). We will take a look at Sandy Spring Bancorp Inc. (NASDAQ:SASR), Grupo Simec S.A.B. de C.V. (NYSE:SIM), FARO Technologies, Inc. (NASDAQ:FARO), Adaptimmune Therapeutics plc (NASDAQ:ADAP), Constellium SE (NYSE:CSTM), Marcus & Millichap Inc (NYSE:MMI), and Cadence Bancorporation (NYSE:CADE). This group of stocks’ market values resemble FDP’s market value.
|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 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $168 million. That figure was $24 million in FDP’s case. Constellium SE (NYSE:CSTM) is the most popular stock in this table. On the other hand Grupo Simec S.A.B. de C.V. (NYSE:SIM) is the least popular one with only 1 bullish hedge fund positions. Fresh Del Monte Produce Inc (NYSE:FDP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FDP is 45. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on FDP as the stock returned 13.7% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.