The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider The J.M. Smucker Company (NYSE:SJM) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
The J.M. Smucker Company (NYSE:SJM) investors should pay attention to a decrease in hedge fund interest lately. The J.M. Smucker Company (NYSE:SJM) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic is 47. There were 34 hedge funds in our database with SJM positions at the end of the second quarter. Our calculations also showed that SJM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now we’re going to review the recent hedge fund action encompassing The J.M. Smucker Company (NYSE:SJM).
John Rogers of Ariel Investments
Do Hedge Funds Think SJM Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -26% from the second quarter of 2021. On the other hand, there were a total of 31 hedge funds with a bullish position in SJM a year ago. 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 The J.M. Smucker Company (NYSE:SJM) was held by Ariel Investments, which reported holding $165.7 million worth of stock at the end of September. It was followed by AQR Capital Management with a $102.9 million position. Other investors bullish on the company included Renaissance Technologies, GAMCO Investors, and Bridgewater Associates. In terms of the portfolio weights assigned to each position Kehrs Ridge Capital allocated the biggest weight to The J.M. Smucker Company (NYSE:SJM), around 1.94% of its 13F portfolio. Ariel Investments is also relatively very bullish on the stock, designating 1.52 percent of its 13F equity portfolio to SJM.
Due to the fact that The J.M. Smucker Company (NYSE:SJM) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there were a few hedgies who were dropping their positions entirely in the third quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest investment of the “upper crust” of funds watched by Insider Monkey, comprising an estimated $26.7 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $17.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 9 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as The J.M. Smucker Company (NYSE:SJM) but similarly valued. We will take a look at W.R. Berkley Corporation (NYSE:WRB), Fidelity National Financial Inc (NYSE:FNF), Lincoln National Corporation (NYSE:LNC), SoFi Technologies Inc. (NASDAQ:SOFI), Discovery Inc. (NASDAQ:DISCA), Whirlpool Corporation (NYSE:WHR), and Santander Consumer USA Holdings Inc (NYSE:SC). This group of stocks’ market valuations are similar to SJM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WRB | 26 | 593633 | -10 |
| FNF | 32 | 1390536 | -2 |
| LNC | 29 | 734657 | -1 |
| SOFI | 33 | 852850 | -6 |
| DISCA | 42 | 515818 | -2 |
| WHR | 29 | 1134128 | -3 |
| SC | 18 | 752098 | -8 |
| Average | 29.9 | 853389 | -4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $853 million. That figure was $506 million in SJM’s case. Discovery Inc. (NASDAQ:DISCA) is the most popular stock in this table. On the other hand Santander Consumer USA Holdings Inc (NYSE:SC) is the least popular one with only 18 bullish hedge fund positions. The J.M. Smucker Company (NYSE:SJM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SJM is 26.5. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on SJM as the stock returned 9.6% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.
Follow J M Smucker Co (NYSE:SJM)
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Disclosure: None. This article was originally published at Insider Monkey.
