Is Ingredion Inc (INGR) A Good Stock To Buy?

Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. Between November 1, 2014 and October 30 of this year, less than 49% of the stocks in the S&P 500 beat the market. However, hedge funds’ top 30 stock picks from the index had a much higher success rate than this, at 63%. The returns from these 30 stocks also easily bested the broader market, at 9.5% compared to 5.2%, despite there being a few duds in there like Micron and Anadarko (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.

Ingredion Inc (NYSE:INGR) has experienced an increase in support from the world’s most elite money managers in recent months. At the end of this article we will also compare INGR to other stocks including NVR, Inc. (NYSE:NVR), TECO Energy, Inc. (NYSE:TE), and Qihoo 360 Technology Co Ltd (NYSE:QIHU) to get a better sense of its popularity.

With all of this in mind, let’s go over the recent action encompassing Ingredion Inc (NYSE:INGR).

What have hedge funds been doing with Ingredion Inc (NYSE:INGR)?

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the largest position in Ingredion Inc (NYSE:INGR), worth close to $65.5 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, holding a $39.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism consist of Dmitry Balyasny’s Balyasny Asset Management, David Harding’s Winton Capital Management and Mario Gabelli’s GAMCO Investors.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, created the largest position in Ingredion Inc (NYSE:INGR). Balyasny Asset Management had $25.6 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also initiated a $5 million position during the quarter. The following funds were also among the new INGR investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Ingredion Inc (NYSE:INGR) but similarly valued. These stocks are NVR, Inc. (NYSE:NVR), TECO Energy, Inc. (NYSE:TE), Qihoo 360 Technology Co Ltd (NYSE:QIHU), and Mid America Apartment Communities Inc (NYSE:MAA). All of these stocks’ market caps are similar to INGR’s market cap.

As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $375 million. That figure was $203 million in INGR’s case. NVR, Inc. (NYSE:NVR) is the most popular stock in this table. On the other hand Mid America Apartment Communities Inc (NYSE:MAA) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Ingredion Inc (NYSE:INGR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.