Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of G. Willi-Food International Limited (NASDAQ:WILC) based on that data.
G. Willi-Food International Limited (NASDAQ:WILC) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 2 hedge funds’ portfolios at the end of the third quarter of 2019. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The ExOne Company (NASDAQ:XONE), Pareteum Corporation (NASDAQ:TEUM), and Aldeyra Therapeutics Inc (NASDAQ:ALDX) to gather more data points. Our calculations also showed that WILC isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
Jim Simons founder of RENAISSANCE TECHNOLOGIES
We’re going to review the key hedge fund action regarding G. Willi-Food International Limited (NASDAQ:WILC).
What does smart money think about G. Willi-Food International Limited (NASDAQ:WILC)?
At Q3’s end, a total of 2 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WILC over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in G. Willi-Food International Limited (NASDAQ:WILC) was held by Springhouse Capital Management, which reported holding $11.6 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $7.3 million position.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks similar to G. Willi-Food International Limited (NASDAQ:WILC). We will take a look at The ExOne Company (NASDAQ:XONE), Pareteum Corporation (NASDAQ:TEUM), Aldeyra Therapeutics Inc (NASDAQ:ALDX), and First Community Corporation (NASDAQ:FCCO). This group of stocks’ market valuations resemble WILC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XONE | 4 | 1501 | -1 |
| TEUM | 5 | 3839 | 2 |
| ALDX | 12 | 46995 | -4 |
| FCCO | 3 | 8389 | -1 |
| Average | 6 | 15181 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $19 million in WILC’s case. Aldeyra Therapeutics Inc (NASDAQ:ALDX) is the most popular stock in this table. On the other hand First Community Corporation (NASDAQ:FCCO) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks G. Willi-Food International Limited (NASDAQ:WILC) is even less popular than FCCO. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. A small number of hedge funds were also right about betting on WILC, though not to the same extent, as the stock returned 7.5% during the fourth quarter (through 11/22) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.