B&G Foods, Inc. (NYSE:BGS) shareholders have witnessed an increase in hedge fund interest in recent months.
According to most traders, hedge funds are assumed to be worthless, outdated financial tools of years past. While there are over 8000 funds in operation today, we at Insider Monkey look at the elite of this group, about 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their best picks, we have spotted a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as key, positive insider trading sentiment is a second way to parse down the stock market universe. There are a number of incentives for an upper level exec to sell shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the useful potential of this tactic if investors know where to look (learn more here).
Keeping this in mind, it’s important to take a look at the recent action regarding B&G Foods, Inc. (NYSE:BGS).
How have hedgies been trading B&G Foods, Inc. (NYSE:BGS)?
Heading into 2013, a total of 9 of the hedge funds we track were bullish in this stock, a change of 80% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly.
Of the funds we track, Ric Dillon’s Diamond Hill Capital had the largest position in B&G Foods, Inc. (NYSE:BGS), worth close to $14 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $4 million position; 0% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Russell Lucas’s Lucas Capital Management, Douglas W. Case’s Advanced Investment Partners and Cliff Asness’s AQR Capital Management.
As aggregate interest increased, specific money managers have jumped into B&G Foods, Inc. (NYSE:BGS) headfirst. Citadel Investment Group, managed by Ken Griffin, created the biggest position in B&G Foods, Inc. (NYSE:BGS). Citadel Investment Group had 4 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies, and Steven Cohen’s SAC Capital Advisors.
How have insiders been trading B&G Foods, Inc. (NYSE:BGS)?
Bullish insider trading is best served when the primary stock in question has seen transactions within the past six months. Over the last six-month time period, B&G Foods, Inc. (NYSE:BGS) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to B&G Foods, Inc. (NYSE:BGS). These stocks are The Hain Celestial Group, Inc. (NASDAQ:HAIN), Gruma S.A.B. de C.V. (ADR) (NYSE:GMK), TreeHouse Foods Inc. (NYSE:THS), J&J Snack Foods Corp. (NASDAQ:JJSF), and Snyder S Lance Inc (NASDAQ:LNCE). This group of stocks are the members of the processed & packaged goods industry and their market caps match BGS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| The Hain Celestial Group, Inc. (NASDAQ:HAIN) | 20 | 1 | 1 |
| Gruma S.A.B. de C.V. (ADR) (NYSE:GMK) | 1 | 0 | 0 |
| TreeHouse Foods Inc. (NYSE:THS) | 11 | 0 | 6 |
| J&J Snack Foods Corp. (NASDAQ:JJSF) | 10 | 1 | 8 |
| Snyder S Lance Inc (NASDAQ:LNCE) | 6 | 0 | 5 |
With the returns exhibited by our strategies, everyday investors must always monitor hedge fund and insider trading sentiment, and B&G Foods, Inc. (NYSE:BGS) applies perfectly to this mantra.
