Hedge funds are not perfect. They have their bad picks just like everyone else. Valeant, a stock hedge funds have loved, lost 79% during the last 12 months ending in November 21. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 mid-cap stocks among the best performing hedge funds yielded an average return of 18% in the same time period, vs. a gain of 7.6% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Campbell Soup Company (NYSE:CPB).
Is Campbell Soup Company (NYSE:CPB) an attractive investment today? The best stock pickers are getting less bullish. The number of long hedge fund positions dropped by 2 in recent months. CPB was in 27 hedge funds’ portfolios at the end of September. There were 29 hedge funds in our database with CPB holdings at the end of the previous quarter. At the end of this article we will also compare CPB to other stocks including TE Connectivity Ltd. (NYSE:TEL), Boston Properties, Inc. (NYSE:BXP), and Sun Life Financial Inc. (USA) (NYSE:SLF) to get a better sense of its popularity.
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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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Hedge fund activity in Campbell Soup Company (NYSE:CPB)
At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 7% dip from the previous quarter. That followed a greater than 50% rise in hedge fund ownership during the prior 2 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’ AQR Capital Management has the most valuable position in Campbell Soup Company (NYSE:CPB), worth close to $67 million. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $43.5 million position. Some other members of the smart money that are bullish comprise Mario Gabelli’s GAMCO Investors, Clint Carlson’s Carlson Capital, and Joel Greenblatt’s Gotham Asset Management.
Because Campbell Soup Company (NYSE:CPB) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of funds who sold off their entire stakes last quarter. Interestingly, Steve Cohen’s Point72 Asset Management dumped the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at close to $19.8 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also sold off its stock, about $16.2 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Campbell Soup Company (NYSE:CPB) but similarly valued. We will take a look at TE Connectivity Ltd. (NYSE:TEL), Boston Properties, Inc. (NYSE:BXP), Sun Life Financial Inc. (USA) (NYSE:SLF), and Marathon Petroleum Corp (NYSE:MPC). This group of stocks’ market valuations are closest to CPB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEL | 23 | 869744 | -2 |
| BXP | 17 | 404364 | -1 |
| SLF | 13 | 76979 | 3 |
| MPC | 53 | 2796683 | 10 |
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.04 billion. That figure was $291 million in CPB’s case. Marathon Petroleum Corp (NYSE:MPC) is the most popular stock in this table. On the other hand Sun Life Financial Inc. (USA) (NYSE:SLF) is the least popular one with only 13 bullish hedge fund positions. Campbell Soup Company (NYSE:CPB) 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 MPC might be a better candidate to consider for a long position.
Disclosure: None
