Hedge Funds Are Buying Green Mountain Coffee Roasters Inc. (GMCR)

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) investors should be aware of an increase in support from the world’s most elite money managers of late.

In the eyes of most stock holders, hedge funds are seen as underperforming, old investment vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the elite of this club, close to 450 funds. It is widely believed that this group has its hands on the majority of the hedge fund industry’s total capital, and by tracking their best stock picks, we have found a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as key, positive insider trading sentiment is another way to break down the investments you’re interested in. Just as you’d expect, there are lots of stimuli for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if shareholders understand where to look (learn more here).

With these “truths” under our belt, let’s take a look at the recent action surrounding Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR).

What have hedge funds been doing with Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)?

In preparation for this quarter, a total of 24 of the hedge funds we track were bullish in this stock, a change of 4% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Coatue Management, managed by Philippe Laffont, holds the largest position in Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). Coatue Management has a $291.1 million position in the stock, comprising 3.7% of its 13F portfolio. Coming in second is Gilchrist Berg of Water Street Capital, with a $159 million position; the fund has 5% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Brett Barakett’s Tremblant Capital, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC and Edward Goodnow’s Goodnow Investment Group.

Consequently, key money managers have jumped into Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) headfirst. Coatue Management, managed by Philippe Laffont, assembled the most valuable position in Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR). Coatue Management had 291.1 million invested in the company at the end of the quarter. Chase Coleman and Feroz Dewan’s Tiger Global Management LLC also made a $56.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Rob Citrone’s Discovery Capital Management, Jeffrey Tannenbaum’s Fir Tree, and Andrew Sandler’s Sandler Capital Management.

What have insiders been doing with Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)?

Insider purchases made by high-level executives is best served when the company in question has seen transactions within the past half-year. Over the latest six-month time frame, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has experienced zero unique insiders buying, and 12 insider sales (see the details of insider trades here).

Let’s go over 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). This group of stocks are the members of the processed & packaged goods industry and their market caps match GMCR’s market cap.

With the results shown by our research, everyday investors should always monitor hedge fund and insider trading sentiment, and Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) shareholders fit into this picture quite nicely.

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