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 at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Sonoco Products Company (NYSE:SON) and determine whether the smart money was really smart about this stock.
Sonoco Products Company (NYSE:SON) has experienced an increase in enthusiasm from smart money lately. Sonoco Products Company (NYSE:SON) was in 25 hedge funds’ portfolios at the end of June. The all time high for this statistics is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 23 hedge funds in our database with SON holdings at the end of March. Our calculations also showed that SON isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are many signals investors employ to analyze their stock investments. A pair of the most under-the-radar signals are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best money managers can outperform the S&P 500 by a solid margin (see the details here).
Ray Dalio of Bridgewater Associates
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now let’s check out the recent hedge fund action surrounding Sonoco Products Company (NYSE:SON).
How are hedge funds trading Sonoco Products Company (NYSE:SON)?
At the end of the second quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the first quarter of 2020. On the other hand, there were a total of 19 hedge funds with a bullish position in SON 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.
Among these funds, Citadel Investment Group held the most valuable stake in Sonoco Products Company (NYSE:SON), which was worth $42.4 million at the end of the third quarter. On the second spot was Impax Asset Management which amassed $24.9 million worth of shares. AQR Capital Management, Royce & Associates, and GAMCO Investors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Navellier & Associates allocated the biggest weight to Sonoco Products Company (NYSE:SON), around 0.48% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, earmarking 0.32 percent of its 13F equity portfolio to SON.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Renaissance Technologies, initiated the largest position in Sonoco Products Company (NYSE:SON). Renaissance Technologies had $1.8 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also initiated a $1 million position during the quarter. The other funds with brand new SON positions are Minhua Zhang’s Weld Capital Management, Donald Sussman’s Paloma Partners, and Michael Gelband’s ExodusPoint Capital.
Let’s also examine hedge fund activity in other stocks similar to Sonoco Products Company (NYSE:SON). We will take a look at First Solar, Inc. (NASDAQ:FSLR), Reata Pharmaceuticals, Inc. (NASDAQ:RETA), Planet Fitness Inc (NYSE:PLNT), CubeSmart (NYSE:CUBE), Enel Chile S.A. (NYSE:ENIC), Yamana Gold Inc. (NYSE:AUY), and Vedanta Ltd (NYSE:VEDL). All of these stocks’ market caps match SON’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSLR | 16 | 68174 | -6 |
| RETA | 34 | 439815 | 1 |
| PLNT | 44 | 1253736 | 0 |
| CUBE | 24 | 211307 | 6 |
| ENIC | 5 | 15818 | -3 |
| AUY | 18 | 407399 | 4 |
| VEDL | 9 | 46209 | -2 |
| Average | 21.4 | 348923 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.4 hedge funds with bullish positions and the average amount invested in these stocks was $349 million. That figure was $129 million in SON’s case. Planet Fitness Inc (NYSE:PLNT) is the most popular stock in this table. On the other hand Enel Chile S.A. (NYSE:ENIC) is the least popular one with only 5 bullish hedge fund positions. Sonoco Products Company (NYSE:SON) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SON is 62.6. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately SON wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SON were disappointed as the stock returned -3.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Follow Sonoco Products Co (NYSE:SON)
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Disclosure: None. This article was originally published at Insider Monkey.
