Do Hedge Funds and Insiders Love Cal-Maine Foods Inc (CALM)?

Is Cal-Maine Foods Inc (NASDAQ:CALM) the right pick for your portfolio? Money managers are getting less optimistic. The number of long hedge fund bets went down by 1 recently.

According to most stock holders, hedge funds are assumed to be unimportant, old investment tools of the past. While there are more than 8000 funds trading today, we at Insider Monkey choose to focus on the bigwigs of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total asset base, and by paying attention to their highest performing picks, we have unsheathed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as beneficial, positive insider trading activity is a second way to break down the world of equities. Obviously, there are a number of reasons for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).

With all of this in mind, we’re going to take a look at the key action regarding Cal-Maine Foods Inc (NASDAQ:CALM).

Hedge fund activity in Cal-Maine Foods Inc (NASDAQ:CALM)

Heading into Q2, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Cal-Maine Foods Inc (NASDAQ:CALM), worth close to $97.4 million, accounting for 0.3% of its total 13F portfolio. On Royce & Associates’s heels is Martin Whitman of Third Avenue Management, with a $23.4 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Because Cal-Maine Foods Inc (NASDAQ:CALM) has experienced declining sentiment from hedge fund managers, logic holds that there was a specific group of hedge funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Steven Cohen’s SAC Capital Advisors cut the biggest position of the 450+ funds we key on, totaling close to $0.3 million in stock., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund dumped about $0.2 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds last quarter.

How have insiders been trading Cal-Maine Foods Inc (NASDAQ:CALM)?

Insider buying is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time period, Cal-Maine Foods Inc (NASDAQ:CALM) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Cal-Maine Foods Inc (NASDAQ:CALM). These stocks are Lancaster Colony Corp. (NASDAQ:LANC), Annies Inc (NYSE:BNNY), Post Holdings Inc (NYSE:POST), Sanderson Farms, Inc. (NASDAQ:SAFM), and Dole Food Company, Inc. (NYSE:DOLE). This group of stocks are the members of the food – major diversified industry and their market caps are closest to CALM’s market cap.