The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Nomad Foods Limited (NYSE:NOMD).
Is Nomad Foods Limited (NYSE:NOMD) an exceptional stock to buy now? Investors who are in the know were in a bearish mood. The number of long hedge fund bets were cut by 3 lately. Nomad Foods Limited (NYSE:NOMD) was in 25 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that NOMD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the 21st century investor’s toolkit there are a multitude of signals shareholders put to use to analyze their holdings. Some of the most under-the-radar signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the broader indices by a superb margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
David E. Shaw of D.E. Shaw
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Do Hedge Funds Think NOMD Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. On the other hand, there were a total of 34 hedge funds with a bullish position in NOMD a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Nomad Foods Limited (NYSE:NOMD), which was worth $128.8 million at the end of the fourth quarter. On the second spot was D E Shaw which amassed $24.6 million worth of shares. Chescapmanager LLC, AltraVue Capital, and Maplelane Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position AltraVue Capital allocated the biggest weight to Nomad Foods Limited (NYSE:NOMD), around 6.71% of its 13F portfolio. Kehrs Ridge Capital is also relatively very bullish on the stock, earmarking 3.57 percent of its 13F equity portfolio to NOMD.
Because Nomad Foods Limited (NYSE:NOMD) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few funds that decided to sell off their positions entirely heading into Q2. It’s worth mentioning that Oscar Hattink’s BlueDrive Global Investors said goodbye to the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth close to $31.5 million in stock, and Sahm Adrangi’s Kerrisdale Capital was right behind this move, as the fund dropped about $2.8 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds heading into Q2.
Let’s check out hedge fund activity in other stocks similar to Nomad Foods Limited (NYSE:NOMD). These stocks are Lancaster Colony Corporation (NASDAQ:LANC), Nevro Corp (NYSE:NVRO), Xerox Holdings Corporation (NYSE:XRX), SelectQuote, Inc. (NYSE:SLQT), Magnite Inc. (NASDAQ:MGNI), Allegro MicroSystems, Inc. (NASDAQ:ALGM), and FTI Consulting, Inc. (NYSE:FCN). All of these stocks’ market caps resemble NOMD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LANC | 22 | 246061 | 3 |
| NVRO | 29 | 649613 | -1 |
| XRX | 30 | 1044775 | 3 |
| SLQT | 17 | 185055 | -2 |
| MGNI | 25 | 335746 | -4 |
| ALGM | 17 | 90381 | 1 |
| FCN | 24 | 520173 | -1 |
| Average | 23.4 | 438829 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $439 million. That figure was $324 million in NOMD’s case. Xerox Holdings Corporation (NYSE:XRX) is the most popular stock in this table. On the other hand SelectQuote, Inc. (NYSE:SLQT) is the least popular one with only 17 bullish hedge fund positions. Nomad Foods Limited (NYSE:NOMD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NOMD is 50.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately NOMD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NOMD were disappointed as the stock returned 3.8% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Nomad Foods Ltd (NYSE:NOMD)
Follow Nomad Foods Ltd (NYSE:NOMD)
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Disclosure: None. This article was originally published at Insider Monkey.
