After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards General Mills, Inc. (NYSE:GIS).
Is General Mills, Inc. (NYSE:GIS) an excellent investment now? Investors who are in the know were in a pessimistic mood. The number of long hedge fund bets were trimmed by 5 in recent months. General Mills, Inc. (NYSE:GIS) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. Our calculations also showed that GIS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Paul Marshall of Marshall Wace
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 let’s take a look at the new hedge fund action regarding General Mills, Inc. (NYSE:GIS).
Do Hedge Funds Think GIS Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GIS over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the number one position in General Mills, Inc. (NYSE:GIS). Renaissance Technologies has a $255.5 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Panayotis Takis Sparaggis of Alkeon Capital Management, with a $119.6 million call position; 0.2% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish contain Ken Griffin’s Citadel Investment Group, Paul Marshall and Ian Wace’s Marshall Wace LLP and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Half Sky Capital allocated the biggest weight to General Mills, Inc. (NYSE:GIS), around 14.89% of its 13F portfolio. Wallace Capital Management is also relatively very bullish on the stock, dishing out 1.97 percent of its 13F equity portfolio to GIS.
Due to the fact that General Mills, Inc. (NYSE:GIS) has faced a decline in interest from the smart money, we can see that there is a sect of hedge funds who sold off their entire stakes heading into Q4. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest stake of all the hedgies followed by Insider Monkey, valued at about $36.8 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dumped about $20 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 5 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to General Mills, Inc. (NYSE:GIS). These stocks are SBA Communications Corporation (NASDAQ:SBAC), Yum! Brands, Inc. (NYSE:YUM), Cloudflare, Inc. (NYSE:NET), Mizuho Financial Group Inc. (NYSE:MFG), Robinhood Markets Inc. (NASDAQ:HOOD), Parker-Hannifin Corporation (NYSE:PH), and AutoZone, Inc. (NYSE:AZO). All of these stocks’ market caps are similar to GIS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBAC | 36 | 1893871 | -7 |
| YUM | 38 | 757636 | 3 |
| NET | 50 | 958432 | 7 |
| MFG | 6 | 13164 | 0 |
| HOOD | 20 | 4685841 | 20 |
| PH | 39 | 1973795 | -3 |
| AZO | 35 | 1020383 | 1 |
| Average | 32 | 1614732 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1615 million. That figure was $732 million in GIS’s case. Cloudflare, Inc. (NYSE:NET) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 6 bullish hedge fund positions. General Mills, Inc. (NYSE:GIS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GIS is 52.4. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately GIS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GIS investors were disappointed as the stock returned 4.1% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
