Is VLGEA A Good Stock To Buy Now?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Village Super Market, Inc. (NASDAQ:VLGEA), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

IS VLGEA a good stock to buy now? Village Super Market, Inc. (NASDAQ:VLGEA) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. Village Super Market, Inc. (NASDAQ:VLGEA) was in 10 hedge funds’ portfolios at the end of September. The all time high for this statistics is 10. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that VLGEA 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.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

David Harding

David Harding of Winton Capital Management

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. Keeping this in mind we’re going to take a look at the new hedge fund action regarding Village Super Market, Inc. (NASDAQ:VLGEA).

Do Hedge Funds Think VLGEA Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in VLGEA over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

Is VLGEA A Good Stock To Buy?

More specifically, Renaissance Technologies was the largest shareholder of Village Super Market, Inc. (NASDAQ:VLGEA), with a stake worth $18.2 million reported as of the end of September. Trailing Renaissance Technologies was GAMCO Investors, which amassed a stake valued at $2.9 million. Winton Capital Management, Arrowstreet Capital, and Royce & Associates 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 Zebra Capital Management allocated the biggest weight to Village Super Market, Inc. (NASDAQ:VLGEA), around 0.48% of its 13F portfolio. AltraVue Capital is also relatively very bullish on the stock, dishing out 0.45 percent of its 13F equity portfolio to VLGEA.

Consequently, key money managers have jumped into Village Super Market, Inc. (NASDAQ:VLGEA) headfirst. AltraVue Capital, managed by Touk Sinantha, assembled the most valuable position in Village Super Market, Inc. (NASDAQ:VLGEA). AltraVue Capital had $0.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Cliff Asness’s AQR Capital Management.

Let’s now review hedge fund activity in other stocks similar to Village Super Market, Inc. (NASDAQ:VLGEA). These stocks are Corporacion America Airports SA (NYSE:CAAP), Cellular Biomedicine Group, Inc. (NASDAQ:CBMG), Superior Group of Companies, Inc. (NASDAQ:SGC), Fortress Biotech Inc (NASDAQ:FBIO), Bluegreen Vacations Corporation (NYSE:BXG), Cardiff Oncology, Inc. (NASDAQ:CRDF), and ShotSpotter, Inc. (NASDAQ:SSTI). All of these stocks’ market caps resemble VLGEA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CAAP 4 4063 -3
CBMG 7 18005 3
SGC 6 9509 2
FBIO 8 48680 2
BXG 5 1706 -3
CRDF 17 113568 10
SSTI 10 27169 3
Average 8.1 31814 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $29 million in VLGEA’s case. Cardiff Oncology, Inc. (NASDAQ:CRDF) is the most popular stock in this table. On the other hand Corporacion America Airports SA (NYSE:CAAP) is the least popular one with only 4 bullish hedge fund positions. Village Super Market, Inc. (NASDAQ:VLGEA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VLGEA is 60.1. 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 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 beat the market again by 16.2 percentage points. Unfortunately VLGEA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on VLGEA were disappointed as the stock returned -6.1% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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Disclosure: None. This article was originally published at Insider Monkey.