Hedge Funds Are Buying Tupperware Brands Corporation (TUP)

Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Tupperware Brands Corporation (NYSE:TUP) from the perspective of those elite funds.

Tupperware Brands Corporation (NYSE:TUP) was in 25 hedge funds’ portfolios at the end of September. TUP investors should pay attention to an increase in hedge fund sentiment of late. There were 14 hedge funds in our database with TUP holdings at the end of the previous quarter. At the end of this article we will also compare TUP to other stocks including LifePoint Hospitals, Inc. (NASDAQ:LPNT), Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), and Nabors Industries Ltd. (NYSE:NBR) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, let’s review the new action surrounding Tupperware Brands Corporation (NYSE:TUP).

What have hedge funds been doing with Tupperware Brands Corporation (NYSE:TUP)?

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a massive jump of 79% from the second quarter of 2016. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Joe Huber’s Huber Capital Management has the most valuable position in Tupperware Brands Corporation (NYSE:TUP), worth close to $84.1 million and comprising 3.3% of its total 13F portfolio. The second largest stake is held by Jeffrey Bronchick of Cove Street Capital, with a $18.3 million position; 2% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish contain Cliff Asness’s AQR Capital Management, and Anthony Scaramucciá’s Skybridge Capital.

Now, specific money managers were leading the bulls’ herd. Jeffrey Bronchick’ Cove Street Capital created the most outsized position in Tupperware Brands Corporation (NYSE:TUP). Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $9.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.

Let’s also examine hedge fund activity in other stocks similar to Tupperware Brands Corporation (NYSE:TUP). These stocks are LifePoint Hospitals, Inc. (NASDAQ:LPNT), Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), Nabors Industries Ltd. (NYSE:NBR), and Avista Corp (NYSE:AVA). This group of stocks’ market values are similar to TUP’s market value.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $254 million. That figure was $196 million in TUP’s case. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) is the most popular stock in this table. On the other hand Avista Corp (NYSE:AVA) is the least popular one with only 9 bullish hedge fund positions. Tupperware Brands Corporation (NYSE:TUP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SBGI might be a better candidate to consider a long position.

Disclsoure: none.