There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Performance Food Group Co (NYSE:PFGC).
Performance Food Group Co (NYSE:PFGC) was included in the equity portfolios of 14 funds from our database at the end of September. The company registered a slight decline in popularity as there had been 15 funds long the stock a quarter earlier. However, 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 ENSCO PLC (NYSE:ESV), Prestige Brands Holdings, Inc. (NYSE:PBH), and InterXion Holding NV (NYSE:INXN) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, let’s view the new action surrounding Performance Food Group Co (NYSE:PFGC).
What does the smart money think about Performance Food Group Co (NYSE:PFGC)?
Heading into the fourth quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, down by 7% from the previous quarter. On the other hand, there were just four hedge funds with a bullish position in PFGC at the beginning of this year. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Paritosh Gupta’s Adi Capital Management has the most valuable position in Performance Food Group Co (NYSE:PFGC), worth close to $8.5 million, corresponding to 6% of its total 13F portfolio. On Adi Capital Management’s heels is Tyvor Capital, led by John Tompkins, which holds a $5.5 million position; 1.4% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism consist of Ira Unschuld’s Brant Point Investment Management, Millennium Management, one of the 10 largest hedge funds in the world, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.