Is Hormel Foods Corporation (HRL) A Good Stock To Buy?

We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

Is Hormel Foods Corporation (NYSE:HRL) the right investment to pursue these days? The best stock pickers are becoming less confident. The number of long hedge fund positions shrunk by 2 lately. HRL was in 27 hedge funds’ portfolios at the end of the third quarter of 2016. There were 29 hedge funds in our database with HRL holdings at the end of the previous quarter. At the end of this article we will also compare HRL to other stocks including Omnicom Group Inc. (NYSE:OMC), L Brands Inc (NYSE:LB), and JD.Com Inc (ADR) (NASDAQ:JD) to get a better sense of its popularity.

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.

Hedge fund activity in Hormel Foods Corporation (NYSE:HRL)

Heading into the fourth quarter of 2016, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a 7% decline from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Hormel Foods Corporation (NYSE:HRL). Citadel Investment Group has a $228.4 million position in the stock. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $92.1 million position. Remaining hedge funds and institutional investors that hold long positions consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Dmitry Balyasny’s Balyasny Asset Management and Israel Englander’s Millennium Management.