Is ZHONGPIN INC. (NASDAQ:HOGS) undervalued? The best stock pickers are in a pessimistic mood. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
In the financial world, there are many methods market participants can use to watch the equity markets. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the S&P 500 by a significant amount (see just how much).
Just as integral, positive insider trading activity is a second way to break down the world of equities. There are a variety of motivations for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).
Consequently, it’s important to take a glance at the recent action surrounding ZHONGPIN INC. (NASDAQ:HOGS).
How are hedge funds trading ZHONGPIN INC. (NASDAQ:HOGS)?
Heading into Q2, a total of 14 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Pine River Capital Management, managed by Brian Taylor, holds the biggest position in ZHONGPIN INC. (NASDAQ:HOGS). Pine River Capital Management has a $25.5 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Matthew Halbower of Pentwater Capital Management, with a $14.8 million position; 0.6% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Zac Hirzel’s Hirzel Capital Management, Charles Clough’s Clough Capital Partners and Jim Simons’s Renaissance Technologies.
Seeing as ZHONGPIN INC. (NASDAQ:HOGS) has experienced bearish sentiment from the smart money, it’s safe to say that there were a few funds that elected to cut their entire stakes heading into Q2. Interestingly, John Arnold’s Centaurus Advisors said goodbye to the biggest position of the 450+ funds we monitor, worth about $1.9 million in stock.. SAC Subsidiary’s fund, CR Intrinsic Investors, also sold off its stock, about $0.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading ZHONGPIN INC. (NASDAQ:HOGS)?
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, ZHONGPIN INC. (NASDAQ:HOGS) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to ZHONGPIN INC. (NASDAQ:HOGS). These stocks are Cal-Maine Foods Inc (NASDAQ:CALM), Dole Food Company, Inc. (NYSE:DOLE), Amira Nature Foods Ltd (NYSE:ANFI), Annies Inc (NYSE:BNNY), and Central Garden & Pet Co (NASDAQ:CENT). This group of stocks are the members of the food – major diversified industry and their market caps are similar to HOGS’s market cap.