Four stocks from the retail, finance and technology segments are rallying on Wednesday, amid strong moves in the main indices. Let’s take a look at the factors which have led to the performance of these companies and see what is the sentiment toward them among the funds from our database.
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At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Milwaukee-based supermarket operator Roundy’s Inc. (NYSE:RNDY) made a big leap on Wednesday, with a 58.93% gain since the opening bell. The positive investor sentiment followed after Cincinnati-based Kroger Co. (NYSE:KR) announced plans to acquire Roundy’s Inc. (NYSE:RNDY) in an $800 million deal, including debt, or $3.60 per share. To execute the agreement, Kroger Co. (NYSE:KR) will launch a tender offer for all of the outstanding shares of Roundy’s common stock. Shares of Roundy’s Inc. (NYSE:RNDY) common stock which are not acquired will be sold to Kroger in a subsequent merger, the companies said in a joint statement. According to our database, 33 out of 730 funds in our database held 2.80% of the Roundy’s Inc. (NYSE:RNDY)’s outstanding stock at the end of June. Among them, billionaire quant Jim Simons’ Renaissance Technologies, reported holding 1.74 million shares of Roundy’s as of the end of June; Renaissance more than doubled the stake over the quarter.
On the following page we are going to discuss the developments behind the appreciation of Amira Nature Foods Ltd. (NYSE:ANFI), Mizuho Financial Group Inc. (NYSE:MFG), and Alarm.Com Holdings Inc. (NASDAQ:ALRM).
