Is Sanderson Farms, Inc. (SAFM) A Good Stock To Buy?

Seeing as Sanderson Farms, Inc. (NASDAQ:SAFM) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers that decided to sell off their entire stakes in the third quarter. Intriguingly, Ricky Sandler’s Eminence Capital dumped the largest stake of all the hedgies watched by Insider Monkey, worth about $24.7 million in stock. John Smith Clark’s fund, Southpoint Capital Advisors, also sold off its stock, about $7.5 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Sanderson Farms, Inc. (NASDAQ:SAFM). We will take a look at Acxiom Corporation (NASDAQ:ACXM), WMS Industries Inc. (NYSE:WMS), Revlon Inc (NYSE:REV), and American States Water Co (NYSE:AWR). This group of stocks’ market valuations are closest to SAFM’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ACXM 17 252051 1
WMS 11 329857 -2
REV 9 13145 -1
AWR 5 44184 -2

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $160 million. That figure was $270 million in SAFM’s case. Acxiom Corporation (NASDAQ:ACXM) is the most popular stock in this table. On the other hand American States Water Co (NYSE:AWR) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Sanderson Farms, Inc. (NASDAQ:SAFM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.