We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore, imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional losses; they do (like Ackman’s recent Valeant losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Summit Materials Inc (NYSE:SUM).
Is Summit Materials Inc (NYSE:SUM) a buy? Money managers are turning bullish. The number of bullish hedge fund positions advanced by 9 lately. Summit Materials Inc (NYSE:SUM) was in 30 hedge funds’ portfolios at the end of the third quarter of 2015. There were 21 hedge funds in our database with Summit Materials Inc (NYSE:SUM) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Chemtura Corp (NYSE:CHMT), On Assignment, Inc. (NYSE:ASGN), and Demandware Inc (NYSE:DWRE) to gather more data points.
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According to most shareholders, hedge funds are viewed as worthless, outdated financial tools of the past. While there are over 8,000 funds with their doors open at present, our researchers look at the masters of this group, approximately 700 funds. These hedge fund managers control the bulk of the smart money’s total asset base, and by observing their best picks, Insider Monkey has unearthed a few investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, let’s take a glance at the new action regarding Summit Materials Inc (NYSE:SUM).
What have hedge funds been doing with Summit Materials Inc (NYSE:SUM)?
Heading into Q4, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 43% from the second quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Richard Chilton’s Chilton Investment Company has the most valuable position in Summit Materials Inc (NYSE:SUM), worth close to $39.4 million, accounting for 1.4% of its total 13F portfolio. The second-largest stake is held by Point72 Asset Management, the family office managed by Steve Cohen, holding a $36.7 million position; the firm has 0.3% of its 13F portfolio invested in the stock. Other peers that hold long positions consist of Anand Parekh’s Alyeska Investment Group, Richard Barrera’s Roystone Capital Partners, and Gabriel Plotkin’s Melvin Capital Management.