Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Ingles Markets, Incorporated (NASDAQ:IMKTA).
Is Ingles Markets, Incorporated (NASDAQ:IMKTA) a sound investment today? The smart money is betting on the stock. The number of bullish hedge fund positions increased by 1 lately. Our calculations also showed that imkta isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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.
Let’s analyze the key hedge fund action regarding Ingles Markets, Incorporated (NASDAQ:IMKTA).
How are hedge funds trading Ingles Markets, Incorporated (NASDAQ:IMKTA)?
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IMKTA over the last 15 quarters. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, GAMCO Investors was the largest shareholder of Ingles Markets, Incorporated (NASDAQ:IMKTA), with a stake worth $29.7 million reported as of the end of March. Trailing GAMCO Investors was Arrowstreet Capital, which amassed a stake valued at $3.6 million. AQR Capital Management, Two Sigma Advisors, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, key hedge funds have been driving this bullishness. Intrepid Capital Management, managed by Mark Travis, assembled the biggest position in Ingles Markets, Incorporated (NASDAQ:IMKTA). Intrepid Capital Management had $1 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital also initiated a $0 million position during the quarter.
Let’s check out hedge fund activity in other stocks similar to Ingles Markets, Incorporated (NASDAQ:IMKTA). These stocks are Comtech Telecommunications Corp. (NASDAQ:CMTL), Universal Logistics Holdings, Inc. (NASDAQ:ULH), Aegion Corporation (NASDAQ:AEGN), and National CineMedia, Inc. (NASDAQ:NCMI). This group of stocks’ market caps resemble IMKTA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CMTL | 20 | 90216 | 6 |
| ULH | 10 | 21608 | -1 |
| AEGN | 8 | 24550 | -1 |
| NCMI | 18 | 34063 | -1 |
| Average | 14 | 42609 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $43 million in IMKTA’s case. Comtech Telecommunications Corp. (NASDAQ:CMTL) is the most popular stock in this table. On the other hand Aegion Corporation (NASDAQ:AEGN) is the least popular one with only 8 bullish hedge fund positions. Ingles Markets, Incorporated (NASDAQ:IMKTA) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on IMKTA as the stock returned 15.4% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
