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Is General Mills, Inc. (GIS) Worthy of Your Portfolio?

As industrywide interest jumped, key hedge funds have jumped into General Mills, Inc. (NYSE:GIS) headfirst. Jim Simons’ Renaissance Technologies assembled the most outsized position in General Mills, Inc. (NYSE:GIS). Renaissance Technologies had $117.7 million invested in the company at the end of the quarter. Mark Kingdon’s Kingdon Capital also initiated a $19.2 million position during the quarter. The other funds with brand new GIS positions are George Hall’s Clinton Group, Greg Poole’s Echo Street Capital Management, and Ray Dalio’s Bridgewater Associates.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as General Mills, Inc. (NYSE:GIS) but similarly valued. These stocks are McKesson Corporation (NYSE:MCK), Automatic Data Processing (NASDAQ:ADP), The Bank of New York Mellon Corporation (NYSE:BK), and Kinder Morgan Inc (NYSE:KMI). This group of stocks’ market values are similar to GIS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MCK 59 1502964 -7
ADP 32 817244 -2
BK 47 3520476 6
KMI 68 2836616 15

As you can see these stocks had an average of 52 funds with bullish positions at the end of September and the average amount invested in these stocks was $2.17 billion, compared to $607 million in GIS’s case. Kinder Morgan Inc (NYSE:KMI) is the most popular stock in this table. On the other hand Automatic Data Processing (NASDAQ:ADP) is the least popular one with only 32 bullish hedge fund positions. General Mills, Inc. (NYSE:GIS) 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, Kinder Morgan Inc (NYSE:KMI) might be a better candidate to consider a long position.

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