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PepsiCo, Inc. (NYSE:PEP): Are Hedge Funds Right About This Stock?

Is PepsiCo, Inc. (NYSE:PEP) ready to raly soon? Hedge funds are turning bullish. The number of long hedge fund bets moved up by 2 in recent months.

In the financial world, there are dozens of gauges shareholders can use to analyze the equity markets. A couple of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outpace the market by a solid margin (see just how much).

PepsiCo, Inc. (NYSE:PEP)

Just as integral, optimistic insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are plenty of incentives for an insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).

Consequently, it’s important to take a glance at the recent action surrounding PepsiCo, Inc. (NYSE:PEP).

How are hedge funds trading PepsiCo, Inc. (NYSE:PEP)?

At the end of the fourth quarter, a total of 46 of the hedge funds we track were bullish in this stock, a change of 5% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably.

Of the funds we track, Donald Yacktman’s Yacktman Asset Management had the biggest position in PepsiCo, Inc. (NYSE:PEP), worth close to $1.574 billion, accounting for 9.4% of its total 13F portfolio. Coming in second is Ken Fisher of Fisher Asset Management, with a $565 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Ralph V. Whitworth’s Relational Investors, Boykin Curry’s Eagle Capital Management and Kerr Neilson’s Platinum Asset Management.

As industrywide interest jumped, key money managers have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, assembled the most valuable position in PepsiCo, Inc. (NYSE:PEP). Renaissance Technologies had 175 million invested in the company at the end of the quarter. Larry Foley and Paul Farrell’s Bronson Point Partners also initiated a $21 million position during the quarter. The following funds were also among the new PEP investors: George Soros’s Soros Fund Management, Jacob Gottlieb’s Visium Asset Management, and Douglas W. Case’s Advanced Investment Partners.

What have insiders been doing with PepsiCo, Inc. (NYSE:PEP)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past half-year. Over the last six-month time frame, PepsiCo, Inc. (NYSE:PEP) has seen 1 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

With the results shown by the aforementioned research, retail investors should always pay attention to hedge fund and insider trading sentiment, and PepsiCo, Inc. (NYSE:PEP) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.