We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of General Mills, Inc. (NYSE:GIS).
Is General Mills, Inc. (NYSE:GIS) a healthy stock for your portfolio? The best stock pickers are selling. The number of bullish hedge fund positions shrunk by 5 recently. Our calculations also showed that gis isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to check out the key hedge fund action surrounding General Mills, Inc. (NYSE:GIS).
What have hedge funds been doing with General Mills, Inc. (NYSE:GIS)?
At the end of the first quarter, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the fourth quarter of 2018. On the other hand, there were a total of 36 hedge funds with a bullish position in GIS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
The largest stake in General Mills, Inc. (NYSE:GIS) was held by Renaissance Technologies, which reported holding $190.1 million worth of stock at the end of March. It was followed by Alkeon Capital Management with a $77.4 million position. Other investors bullish on the company included GAMCO Investors, Sirios Capital Management, and Citadel Investment Group.
Due to the fact that General Mills, Inc. (NYSE:GIS) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies who sold off their entire stakes in the third quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management sold off the largest position of all the hedgies watched by Insider Monkey, totaling close to $25.4 million in stock. D. E. Shaw’s fund, D E Shaw, also dumped its stock, about $20.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to General Mills, Inc. (NYSE:GIS). These stocks are Dollar General Corp. (NYSE:DG), Southern Copper Corporation (NYSE:SCCO), Yum! Brands, Inc. (NYSE:YUM), and Electronic Arts Inc. (NASDAQ:EA). All of these stocks’ market caps are similar to GIS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DG | 31 | 1121114 | 1 |
| SCCO | 13 | 235031 | -2 |
| YUM | 32 | 1109729 | -2 |
| EA | 61 | 2742637 | 4 |
| Average | 34.25 | 1302128 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.25 hedge funds with bullish positions and the average amount invested in these stocks was $1302 million. That figure was $511 million in GIS’s case. Electronic Arts Inc. (NASDAQ:EA) is the most popular stock in this table. On the other hand Southern Copper Corporation (NYSE:SCCO) is the least popular one with only 13 bullish hedge fund positions. General Mills, Inc. (NYSE:GIS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately GIS wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GIS investors were disappointed as the stock returned -4.8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
