Here is What Hedge Funds Think About Bob Evans Farms Inc (BOBE)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Bob Evans Farms Inc (NASDAQ:BOBE).

Is Bob Evans Farms Inc (NASDAQ:BOBE) an attractive investment right now? Money managers are reducing their bets on the stock. The number of long hedge fund positions fell by two last quarter. In this way, 16 funds from the Insider Monkey database held shares of the company at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Manitowoc Company, Inc. (NYSE:MTW), Eclipse Resources Corp (NYSE:ECR), and NutriSystem Inc. (NASDAQ:NTRI) to gather more data points.

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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Now, let’s review the new action regarding Bob Evans Farms Inc (NASDAQ:BOBE).

Hedge fund activity in Bob Evans Farms Inc (NASDAQ:BOBE)

Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were long Bob Evans Farms, which represents a fall of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BOBE over the last five quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Tom Sandell’s Sandell Asset Management holds the largest position in Bob Evans Farms Inc (NASDAQ:BOBE), which is worth $48.4 million comprising 12.7% of its 13F portfolio. On Sandell Asset Management’s heels is Clint Carlson’s Carlson Capital, which holds a $32.6 million position. Remaining peers that are bullish comprise Sandell Asset Management, Israel Englander’s Millennium Management and David Costen Haley’s HBK Investments. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Seeing as Bob Evans Farms Inc (NASDAQ:BOBE) has faced bearish sentiment from hedge fund managers, logic holds that there were a few money managers that slashed their entire stakes heading into fourth quarter. Interestingly, Chuck Royce’s Royce & Associates cut the biggest position of all the hedgies monitored by Insider Monkey, totaling about $5.3 million in stock. Jody LaNasa’s fund, Serengeti Asset Management, also dumped its stock, about $2.7 million worth.

Let’s check out hedge fund activity in other stocks similar to Bob Evans Farms Inc (NASDAQ:BOBE). We will take a look at Manitowoc Company, Inc. (NYSE:MTW), Eclipse Resources Corp (NYSE:ECR), NutriSystem Inc. (NASDAQ:NTRI), and Babcock & Wilcox Enterprises Inc (NYSE:BW). All of these stocks’ market caps are similar to BOBE’s market cap.

As you can see these stocks had an average of 20 funds with bullish positions and the average amount invested in these stocks was $148 million. That figure was $109 million in BOBE’s case. Manitowoc Company, Inc. (NYSE:MTW) is the most popular stock in this table. On the other hand Eclipse Resources Corp (NYSE:ECR) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Bob Evans Farms Inc (NASDAQ:BOBE) is even less popular than Eclipse Resources Corp (NYSE:ECR). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None