Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Lancaster Colony Corporation (NASDAQ:LANC)? The smart money sentiment can provide an answer to this question.
Is Lancaster Colony Corporation (NASDAQ:LANC) a healthy stock for your portfolio? The best stock pickers were buying. The number of bullish hedge fund bets increased by 3 lately. Lancaster Colony Corporation (NASDAQ:LANC) was in 22 hedge funds’ portfolios at the end of March. The all time high for this statistic is 26. Our calculations also showed that LANC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 19 hedge funds in our database with LANC positions at the end of the fourth quarter.
Today there are a multitude of gauges investors can use to assess their holdings. Some of the most under-the-radar gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outclass their index-focused peers by a significant amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ken Fisher of Fisher Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a look at the latest hedge fund action encompassing Lancaster Colony Corporation (NASDAQ:LANC).
Do Hedge Funds Think LANC Is A Good Stock To Buy Now?
At the end of March, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16% from the previous quarter. On the other hand, there were a total of 23 hedge funds with a bullish position in LANC a year ago. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the most valuable position in Lancaster Colony Corporation (NASDAQ:LANC). Renaissance Technologies has a $74.7 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Fisher Asset Management, managed by Ken Fisher, which holds a $49.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish encompass Israel Englander’s Millennium Management, Noam Gottesman’s GLG Partners and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Intrinsic Edge Capital allocated the biggest weight to Lancaster Colony Corporation (NASDAQ:LANC), around 0.68% of its 13F portfolio. Candlestick Capital Management is also relatively very bullish on the stock, designating 0.19 percent of its 13F equity portfolio to LANC.
As industrywide interest jumped, key money managers were breaking ground themselves. Candlestick Capital Management, managed by Jack Woodruff, initiated the most valuable position in Lancaster Colony Corporation (NASDAQ:LANC). Candlestick Capital Management had $8.8 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $2.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Lee Ainslie’s Maverick Capital, Jinghua Yan’s TwinBeech Capital, and Donald Sussman’s Paloma Partners.
Let’s now review hedge fund activity in other stocks similar to Lancaster Colony Corporation (NASDAQ:LANC). These stocks are Nevro Corp (NYSE:NVRO), Xerox Holdings Corporation (NYSE:XRX), SelectQuote, Inc. (NYSE:SLQT), Magnite Inc. (NASDAQ:MGNI), Allegro MicroSystems, Inc. (NASDAQ:ALGM), FTI Consulting, Inc. (NYSE:FCN), and Stantec Inc. (NYSE:STN). This group of stocks’ market values match LANC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NVRO | 29 | 649613 | -1 |
| XRX | 30 | 1044775 | 3 |
| SLQT | 17 | 185055 | -2 |
| MGNI | 25 | 335746 | -4 |
| ALGM | 17 | 90381 | 1 |
| FCN | 24 | 520173 | -1 |
| STN | 9 | 39824 | 2 |
| Average | 21.6 | 409367 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.6 hedge funds with bullish positions and the average amount invested in these stocks was $409 million. That figure was $246 million in LANC’s case. Xerox Holdings Corporation (NYSE:XRX) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 9 bullish hedge fund positions. Lancaster Colony Corporation (NASDAQ:LANC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LANC is 64.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on LANC, though not to the same extent, as the stock returned 14.5% since Q1 (through July 16th) and outperformed the market as well.
Follow Lancaster Colony Corp (NASDAQ:LANC)
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Disclosure: None. This article was originally published at Insider Monkey.
