Is Smithfield Foods, Inc. (NYSE:SFD) a healthy stock for your portfolio? The smart money is in a bullish mood. The number of bullish hedge fund positions increased by 4 in recent months.
According to most market participants, hedge funds are seen as underperforming, outdated investment tools of the past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey look at the masters of this group, about 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by keeping an eye on their top stock picks, we have unearthed a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as important, positive insider trading activity is another way to break down the investments you’re interested in. As the old adage goes: there are lots of incentives for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this strategy if shareholders know what to do (learn more here).
Consequently, let’s take a look at the latest action regarding Smithfield Foods, Inc. (NYSE:SFD).
What does the smart money think about Smithfield Foods, Inc. (NYSE:SFD)?
At the end of the fourth quarter, a total of 24 of the hedge funds we track were bullish in this stock, a change of 20% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Phill Gross and Robert Atchinson’s Adage Capital Management had the most valuable position in Smithfield Foods, Inc. (NYSE:SFD), worth close to $65 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Highfields Capital Management, managed by Jonathon Jacobson, which held a $54 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Israel Englander’s Millennium Management, James H. Litinsk’s JHL Capital Group and Thomas Ellis and Todd Hammer’s North Run Capital.
Consequently, key money managers have been driving this bullishness. Carlson Capital, managed by Clint Carlson, initiated the most valuable position in Smithfield Foods, Inc. (NYSE:SFD). Carlson Capital had 13 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $3 million position during the quarter. The following funds were also among the new SFD investors: Curtis Macnguyen’s Ivory Capital (Investment Mgmt), Alexander Mitchell’s Scopus Asset Management, and Paul Tudor Jones’s Tudor Investment Corp.
Insider trading activity in Smithfield Foods, Inc. (NYSE:SFD)
Insider purchases made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time period, Smithfield Foods, Inc. (NYSE:SFD) has seen 2 unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns shown by our time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Smithfield Foods, Inc. (NYSE:SFD) shareholders fit into this picture quite nicely.
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