After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards US Foods Holding Corp. (NYSE:USFD).
US Foods Holding Corp. (NYSE:USFD) was in 40 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 49. USFD investors should pay attention to a decrease in enthusiasm from smart money lately. There were 44 hedge funds in our database with USFD positions at the end of the fourth quarter. Our calculations also showed that USFD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Do Hedge Funds Think USFD Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in USFD over the last 23 quarters. 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, Leonard Green & Partners held the most valuable stake in US Foods Holding Corp. (NYSE:USFD), which was worth $266.8 million at the end of the fourth quarter. On the second spot was Melvin Capital Management which amassed $261.1 million worth of shares. Sachem Head Capital, Melvin Capital Management, and Dorsal Capital 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 Solus Alternative Asset Management allocated the biggest weight to US Foods Holding Corp. (NYSE:USFD), around 14.82% of its 13F portfolio. Dendur Capital is also relatively very bullish on the stock, earmarking 7.2 percent of its 13F equity portfolio to USFD.
Seeing as US Foods Holding Corp. (NYSE:USFD) has experienced a decline in interest from hedge fund managers, logic holds that there were a few funds who sold off their full holdings last quarter. Interestingly, Benjamin Pass’s TOMS Capital cut the largest investment of the 750 funds monitored by Insider Monkey, worth close to $58.7 million in stock, and Michael Kaufman’s MAK Capital One was right behind this move, as the fund sold off about $19.4 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to US Foods Holding Corp. (NYSE:USFD). These stocks are Marathon Oil Corporation (NYSE:MRO), Kinross Gold Corporation (NYSE:KGC), Gold Fields Limited (NYSE:GFI), Hyatt Hotels Corporation (NYSE:H), Juniper Networks, Inc. (NYSE:JNPR), Gerdau SA (NYSE:GGB), and Huntington Ingalls Industries Inc (NYSE:HII). This group of stocks’ market caps resemble USFD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRO | 29 | 423870 | 3 |
| KGC | 27 | 444920 | -9 |
| GFI | 15 | 323946 | 0 |
| H | 23 | 666787 | -4 |
| JNPR | 29 | 317158 | -2 |
| GGB | 11 | 224795 | -4 |
| HII | 20 | 277613 | -1 |
| Average | 22 | 382727 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $383 million. That figure was $1489 million in USFD’s case. Marathon Oil Corporation (NYSE:MRO) is the most popular stock in this table. On the other hand Gerdau SA (NYSE:GGB) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks US Foods Holding Corp. (NYSE:USFD) is more popular among hedge funds. Our overall hedge fund sentiment score for USFD is 75.5. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Unfortunately USFD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on USFD were disappointed as the stock returned 1.2% since the end of the first quarter (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Us Foods Holding Corp. (NYSE:USFD)
Follow Us Foods Holding Corp. (NYSE:USFD)
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Disclosure: None. This article was originally published at Insider Monkey.
