Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. Between November 1, 2014 and October 30 of this year, less than 49% of the stocks in the S&P 500 beat the market. However, hedge funds’ top 30 stock picks from the index had a much higher success rate than this, at 63%. The returns from these 30 stocks also easily bested the broader market, at 9.5% compared to 5.2%, despite there being a few duds in there like Micron and Anadarko (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
Is Campbell Soup Company (NYSE:CPB) a healthy stock for your portfolio? Money managers are in an optimistic mood. The number of long hedge fund positions advanced by 5 in recent months. At the end of this article we will also compare CPB to other stocks including NetEase, Inc (ADR) (NASDAQ:NTES), Endo Health Solutions Inc (NASDAQ:ENDP), and Dollar Tree, Inc. (NASDAQ:DLTR) to get a better sense of its popularity.
Follow Campbell Soup Co (NYSE:CPB)
Follow Campbell Soup Co (NYSE:CPB)
Now, we’re going to take a look at the latest action surrounding Campbell Soup Company (NYSE:CPB).
What have hedge funds been doing with Campbell Soup Company (NYSE:CPB)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, GAMCO Investors, managed by Mario Gabelli, holds the number one position in Campbell Soup Company (NYSE:CPB). GAMCO Investors has a $36.3 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is D E Shaw holding a $24.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Jim Simons’ Renaissance Technologies, Peter Muller’s PDT Partners and Jonathan Soros’ JS Capital.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, assembled the biggest position in Campbell Soup Company (NYSE:CPB). Renaissance Technologies had $11.9 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also initiated a $10 million position during the quarter. The following funds were also among the new CPB investors: David Harding’s Winton Capital Management, George Hall’s Clinton Group, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s go over hedge fund activity in other stocks similar to Campbell Soup Company (NYSE:CPB). We will take a look at NetEase, Inc (ADR) (NASDAQ:NTES), Endo Health Solutions Inc (NASDAQ:ENDP), Dollar Tree, Inc. (NASDAQ:DLTR), and DaVita HealthCare Partners Inc (NYSE:DVA). This group of stocks’ market values are closest to CPB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTES | 26 | 2385050 | -10 |
| ENDP | 61 | 4133074 | -6 |
| DLTR | 52 | 3273014 | -8 |
| DVA | 39 | 4826358 | -5 |
As you can see these stocks had an average of 44.5 hedge funds with bullish positions and the average amount invested in these stocks was $3654 million. That figure was $147 million in CPB’s case. Endo Health Solutions Inc (NASDAQ:ENDP) is the most popular stock in this table. On the other hand NetEase, Inc (ADR) (NASDAQ:NTES) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Campbell Soup Company (NYSE:CPB) is even less popular than NTES. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
