The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded TreeHouse Foods Inc. (NYSE:THS) based on those filings.
TreeHouse Foods Inc. (NYSE:THS) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that THS isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one as well as this tiny lithium play. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s check out the latest hedge fund action encompassing TreeHouse Foods Inc. (NYSE:THS).
What have hedge funds been doing with TreeHouse Foods Inc. (NYSE:THS)?
Heading into the second quarter of 2020, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the fourth quarter of 2019. By comparison, 23 hedge funds held shares or bullish call options in THS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Levin Easterly Partners held the most valuable stake in TreeHouse Foods Inc. (NYSE:THS), which was worth $112.2 million at the end of the third quarter. On the second spot was Marshall Wace LLP which amassed $18.2 million worth of shares. Intrinsic Edge Capital, Ancora Advisors, and Millennium Management 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 Levin Easterly Partners allocated the biggest weight to TreeHouse Foods Inc. (NYSE:THS), around 4.97% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, dishing out 2.08 percent of its 13F equity portfolio to THS.
As aggregate interest increased, some big names were leading the bulls’ herd. Intrinsic Edge Capital, managed by Mark Coe, created the biggest position in TreeHouse Foods Inc. (NYSE:THS). Intrinsic Edge Capital had $15.7 million invested in the company at the end of the quarter. Renaissance Technologies also made a $4.2 million investment in the stock during the quarter. The other funds with brand new THS positions are George McCabe’s Portolan Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Greg Eisner’s Engineers Gate Manager.
Let’s now take a look at hedge fund activity in other stocks similar to TreeHouse Foods Inc. (NYSE:THS). These stocks are Halozyme Therapeutics, Inc. (NASDAQ:HALO), ChemoCentryx Inc (NASDAQ:CCXI), JetBlue Airways Corporation (NASDAQ:JBLU), and Lazard Ltd (NYSE:LAZ). This group of stocks’ market caps are similar to THS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HALO | 23 | 154300 | -2 |
| CCXI | 30 | 561624 | 7 |
| JBLU | 36 | 189627 | 1 |
| LAZ | 15 | 392048 | 1 |
| Average | 26 | 324400 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $324 million. That figure was $226 million in THS’s case. JetBlue Airways Corporation (NASDAQ:JBLU) is the most popular stock in this table. On the other hand Lazard Ltd (NYSE:LAZ) is the least popular one with only 15 bullish hedge fund positions. TreeHouse Foods Inc. (NYSE:THS) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on THS, though not to the same extent, as the stock returned 19.4% during the first two months of the second quarter and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
