Investors Are Acquiring A Taste For Bob Evans Farms Inc (BOBE)

While the market is being driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the U.S, the low commodity prices, and the economic dip in China, many smart money investors are keeping their optimism regarding the current bull run, while nonetheless hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Bob Evans Farms Inc (NASDAQ:BOBE).

Bob Evans Farms Inc (NASDAQ:BOBE) was in 22 hedge funds’ portfolios at the end of the third quarter of 2015. Bob Evans Farms Inc (NASDAQ:BOBE) investors should pay attention to an increase in hedge fund sentiment lately. There were 18 hedge funds in our database with Bob Evans Farms Inc (NASDAQ:BOBE) holdings at the end of the previous quarter. 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 Ingles Markets, Incorporated (NASDAQ:IMKTA), Caesars Acquisition Company (NASDAQ:CACQ), and Spartan Stores, Inc. (NASDAQ:SPTN) to gather more data points.

To most stock holders, hedge funds are seen as underperforming, old financial tools of years past. While there are more than 8,000 funds trading today, our experts choose to focus on the elite of this club, around 700 funds. These money managers watch over the majority of all hedge funds’ total asset base, and by keeping track of their unrivaled picks, Insider Monkey has uncovered a few investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points a year for a decade in their back tests.

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

What does the smart money think about Bob Evans Farms Inc (NASDAQ:BOBE)?

At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a jump of 22% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Discovery Capital Management, managed by billionaire Rob Citrone, holds the largest position in Bob Evans Farms Inc (NASDAQ:BOBE). Discovery Capital Management has an $80.2 million position in the stock, comprising 0.9% of its 13F portfolio. Sitting in the number 2 spot is Sandell Asset Management, managed by activist Tom Sandell, which holds a $70.3 million position; 10.9% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish contain Joel Greenblatt’s Gotham Asset Management, and Chuck Royce’s Royce & Associates.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Sandell Asset Management created the biggest call position in Bob Evans Farms Inc (NASDAQ:BOBE). Sandell Asset Management had $10.8 million invested in the position at the end of the quarter. Israel Englander’s Millennium Management also initiated a $9.9 million position during the quarter. The other funds with new positions in the stock are Chao Ku’s Nine Chapters Capital Management, Neil Chriss’ Hutchin Hill Capital, and Renaissance Technologies.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Bob Evans Farms Inc (NASDAQ:BOBE) but similarly valued. These stocks are Ingles Markets, Incorporated (NASDAQ:IMKTA), Caesars Acquisition Company (NASDAQ:CACQ), Spartan Stores, Inc. (NASDAQ:SPTN), and Crocs, Inc. (NASDAQ:CROX). This group of stocks’ market caps are closest to Bob Evans Farms Inc (NASDAQ:BOBE)’s market cap.

As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $120 million. That figure was $239 million in Bob Evans Farms Inc (NASDAQ:BOBE)’s case. Spartan Stores, Inc. (NASDAQ:SPTN) is the most popular stock in this table. On the other hand Ingles Markets, Incorporated (NASDAQ:IMKTA) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Bob Evans Farms Inc (NASDAQ:BOBE) is more popular among hedge funds and has more invested in it than any of the listed stocks. Considering that hedge funds are fond of this stock in relation to its market cap peers and growing fonder, it may be a good idea to analyze it in detail and potentially include it in your portfolio.