Hedge Funds Love These 5 Supermarket Stocks

#3 Kroger Co (NYSE:KR)

– Elite Investors with Long Positions (as of September 30): 42

– Aggregate Value of Elite Investors’ Holdings (as of September 30): $1.27 billion

Multi-specialty retailer Kroger Co (NYSE:KR) is the only stock on this list that is trading in the green this year. The better-than-expected earnings that the company reported for the third quarter caused its stock to rally over 7% since and increase its year-to-date gains to almost 28%. While analysts were expecting the company to report EPS of $0.39 on revenue of $25.24 billion, Kroger Co (NYSE:KR) reported EPS of $0.43 on revenue of $25.10 billion. With such outperformance this year, it is not a surprise that Kroger is also the top stock on this list when it comes to its increase in popularity. The number of funds in our database long Kroger jumped by 27% by the end of September compared to the end of June. Interestingly, the aggregate value of hedge funds’ holdings in the company during the third quarter also increased by the same magnitude of 27%. All ten of the largest shareholders of the company in our database increased their stake in Kroger by at least 80% during the third quarter. This included  Cliff Asness‘ AQR Capital Management, which almost doubled its stake to 6.7 million shares.

#2 Target Corporation (NYSE:TGT)

– Elite Investors with Long Positions (as of September 30): 44

– Aggregate Value of Elite Investors’ Holdings (as of September 30): $1.45 billion

Target Corporation (NYSE:TGT)’s stock is following an inverted-U shape pattern this year. After having increased gradually throughout the first-half of the year, it has been on a gradual decline since the start of the second-half of 2015 and now trades down by 5.36% year-to-date. Nevertheless, this decline has resulted in the company now boasting an attractive annual dividend yield of 3.12%. The number of funds that were long Target Corporation (NYSE:TGT) at the end of September remained constant from the end of June, but the aggregate value of the Target shares they own saw an increase of $311 million in value during the same period. On November 18, Target Corporation reported its third quarter financial figures, declaring EPS of $0.86 on revenue of $17.60 billion. Analysts on the Street had estimated that the company would report EPS of $0.86 on revenue of $17.57 billion. Ken Griffin‘s Citadel Investment Group boosted its stake in the company by 32% to 2.4 million shares during the third quarter.

#1 Wal-Mart Stores, Inc. (NYSE:WMT)

– Elite Investors with Long Positions (as of September 30): 61

– Aggregate Value of Elite Investors’ Holdings (as of September 30): $7.08 billion

Finally, even after being the only stock on this list which saw a decline in its popularity among hedge funds during the third quarter, Wal-Mart Stores, Inc. (NYSE:WMT) still ended up being the most-loved retailer among those same funds at the end of September. Since the start of the year, Wal-Mart Stores, Inc. (NYSE:WMT) has lost more than 30% of its market capitalization, but several funds have still held on to their conviction for the stock. The number of funds that disclosed owning a stake in Wal-Mart Stores, Inc. declined by four and the aggregate value of investors’ holdings in it declined by $1.4 billion during the third quarter. Contrary to the sentiments of several hedge funds, most analysts on the Street are ‘Neutral’ on the stock and don’t expect it to soar anytime soon, even though the company posted an earnings beat for its most recent quarter. After many quarters of keeping its stake in the company constant, Warren Buffett’s Berkshire Hathaway decreased its holding in Wal-Mart Stores, Inc. by 7% to slightly more than 56 million shares during the third quarter.

Disclosure: None