Should You Buy Fresh Del Monte Produce Inc (FDP)?

The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Fresh Del Monte Produce Inc (NYSE:FDP) from the perspective of those elite funds.

Is Fresh Del Monte Produce Inc (NYSE:FDP) a healthy stock for your portfolio? Money managers are in an optimistic mood. The number of bullish hedge fund positions advanced by 3 recently. Our calculations also showed that fdp isn’t among the 30 most popular stocks among hedge funds. FDP was in 14 hedge funds’ portfolios at the end of September. There were 11 hedge funds in our database with FDP holdings at the end of the previous quarter.

In the financial world there are dozens of indicators stock traders use to size up their holdings. Some of the best indicators are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top money managers can beat the market by a significant amount (see the details here).

Chuck Royce

Let’s review the latest hedge fund action regarding Fresh Del Monte Produce Inc (NYSE:FDP).

What have hedge funds been doing with Fresh Del Monte Produce Inc (NYSE:FDP)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FDP over the last 13 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

No of Hedge Funds with FDP Positions

More specifically, Renaissance Technologies was the largest shareholder of Fresh Del Monte Produce Inc (NYSE:FDP), with a stake worth $18.8 million reported as of the end of September. Trailing Renaissance Technologies was Royce & Associates, which amassed a stake valued at $6.8 million. Millennium Management, Citadel Investment Group, and Algert Coldiron Investors were also very fond of the stock, giving the stock large weights in their portfolios.

With a general bullishness amongst the heavyweights, specific money managers have jumped into Fresh Del Monte Produce Inc (NYSE:FDP) headfirst. Holocene Advisors, managed by Brandon Haley, created the most outsized position in Fresh Del Monte Produce Inc (NYSE:FDP). Holocene Advisors had $0.7 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $0.7 million investment in the stock during the quarter. The following funds were also among the new FDP investors: Matthew Hulsizer’s PEAK6 Capital Management, Matthew Tewksbury’s Stevens Capital Management, and Ken Griffin’s Citadel Investment Group.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Fresh Del Monte Produce Inc (NYSE:FDP) but similarly valued. We will take a look at Provident Financial Services, Inc. (NYSE:PFS), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), TTM Technologies, Inc. (NASDAQ:TTMI), and Walker & Dunlop Inc. (NYSE:WD). This group of stocks’ market valuations are similar to FDP’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PFS 8 50269 1
TRHC 10 31591 -1
TTMI 16 57708 6
WD 18 74453 6
Average 13 53505 3

View table here if you experience formatting issues.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $38 million in FDP’s case. Walker & Dunlop Inc. (NYSE:WD) is the most popular stock in this table. On the other hand Provident Financial Services, Inc. (NYSE:PFS) is the least popular one with only 8 bullish hedge fund positions. Fresh Del Monte Produce Inc (NYSE:FDP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WD might be a better candidate to consider a long position.

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