Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Snyder S Lance Inc (NASDAQ:LNCE).
Is Snyder S Lance Inc (NASDAQ:LNCE) the right investment to pursue these days? Hedge funds are categorically in a bearish mood. The number of bullish hedge fund positions was slashed by 2 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Yelp Inc (NYSE:YELP), The Hanover Insurance Group, Inc. (NYSE:THG), and Catalent Inc (NYSE:CTLT) to gather more data points.
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How are hedge funds trading Snyder S Lance Inc (NASDAQ:LNCE)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 20% drop from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards LNCE over the last 5 quarters, which has declined steadily in 2016. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Mario Gabelli’s GAMCO Investors has the most valuable position in Snyder S Lance Inc (NASDAQ:LNCE), worth close to $84.2 million. Sitting at the No. 2 spot is Millennium Management, one of the 10 largest hedge funds in the world, holding a $25.3 million position. Other professional money managers with similar optimism contain Ken Fisher’s Fisher Asset Management, Ken Griffin’s Citadel Investment Group, and Matthew Tewksbury’s Stevens Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-micro-cap stocks.
Due to the fact that Snyder S Lance Inc (NASDAQ:LNCE) has faced a decline in interest from the smart money, we can see that there were a few hedge funds that slashed their full holdings in the third quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cashed in the biggest position of all the investors studied by Insider Monkey, valued at about $13.8 million in stock, and Jim Simons’ Renaissance Technologies was right behind this move, as the fund dropped about $9.1 million worth of shares.
Let’s go over hedge fund activity in other stocks similar to Snyder S Lance Inc (NASDAQ:LNCE). We will take a look at Yelp Inc (NYSE:YELP), The Hanover Insurance Group, Inc. (NYSE:THG), Catalent Inc (NYSE:CTLT), and Cedar Fair, L.P. (NYSE:FUN). All of these stocks’ market caps are similar to LNCE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YELP | 40 | 1087703 | -5 |
| THG | 16 | 172459 | -3 |
| CTLT | 18 | 132067 | 6 |
| FUN | 12 | 160605 | 2 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $388 million. That figure was $136 million in LNCE’s case. Yelp Inc (NYSE:YELP) is the most popular stock in this table. On the other hand Cedar Fair, L.P. (NYSE:FUN) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Snyder S Lance Inc (NASDAQ:LNCE) is even less popular than FUN. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.
Disclosure: None
