Is Hormel Foods Corporation (HRL) A Good Stock To Buy?

Due to the fact that Hormel Foods Corporation (NYSE:HRL) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedge funds that slashed their positions entirely by the end of the third quarter. Intriguingly, Jim Simons’ Renaissance Technologies sold off the biggest position of all the hedgies monitored by Insider Monkey, worth close to $30 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dumped its stock, about $4.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Hormel Foods Corporation (NYSE:HRL). We will take a look at Omnicom Group Inc. (NYSE:OMC), L Brands Inc (NYSE:LB), JD.Com Inc (ADR) (NASDAQ:JD), and Cummins Inc. (NYSE:CMI). This group of stocks’ market valuations resemble HRL’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OMC 21 732697 -3
LB 32 1319885 3
JD 44 7410928 -7
CMI 29 510425 1

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $2.5 billion. That figure was $707 million in HRL’s case. JD.Com Inc (ADR) (NASDAQ:JD) is the most popular stock in this table. On the other hand Omnicom Group Inc. (NYSE:OMC) is the least popular one with only 21 bullish hedge fund positions. Hormel Foods Corporation (NYSE:HRL) 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 JD might be a better candidate to consider a long position.

Disclosure: None