Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) was in 26 hedge funds’ portfolio at the end of Q2, the latest round of 13F data on record. This is a 2-fund increase over the previous quarter, and while it seems minor, an augmented level of aggregate hedge fund interest should be taken as a serious bullish indicator.
If you’d ask most investors, hedge funds are perceived as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at the moment, we hone in on the top tier of this club, close to 450 funds. It is widely believed that this group has its hands on most of the smart money’s total capital, and by keeping an eye on their best equity investments, we have determined a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped 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 outperformed the S&P 500 index by 33 percentage points in 11 months (check out a sample of our picks).
Equally as beneficial, optimistic insider trading activity is another way to break down the investments you’re interested in. Obviously, there are many incentives for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if shareholders know what to do (learn more here).
Keeping this in mind, let’s take a look at the key action encompassing Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR).
Hedge fund activity in Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)
In preparation for this quarter, a total of 26 of the hedge funds we track were bullish in this stock, a change of 8% from the previous quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their stakes significantly.
Of the funds we track, Coatue Management, managed by Philippe Laffont, holds the largest position in Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). Coatue Management has a $229.5 million position in the stock, comprising 2.5% of its 13F portfolio. On Coatue Management’s heels is Water Street Capital, managed by Gilchrist Berg, which held a $149.2 million position; the fund has 4.8% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Edward Goodnow’s Goodnow Investment Group, and D. E. Shaw’s D E Shaw.
Now, specific money managers were leading the bulls’ herd. Coatue Management, managed by Philippe Laffont, assembled the most outsized position in Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). Coatue Management had 229.5 million invested in the company at the end of the quarter. Gilchrist Berg’s Water Street Capital also initiated a $149.2 million position during the quarter. The following funds were also among the new GMCR investors: Edward Goodnow’s Goodnow Investment Group, Matthew Hulsizer’s PEAK6 Capital Management, and D. E. Shaw’s D E Shaw.
How have insiders been trading Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)?
Insider buying is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time frame, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has experienced 1 unique insiders buying, and 12 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). These stocks are Campbell Soup Company (NYSE:CPB), Ingredion Inc (NYSE:INGR), The J.M. Smucker Company (NYSE:SJM), and McCormick & Company, Incorporated (NYSE:MKC). All of these stocks are in the processed & packaged goods industry and their market caps are similar to GMCR’s market cap.
