A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on SpartanNash Company (NASDAQ:SPTN).
Is SPTN a good stock to buy now? The best stock pickers were taking a pessimistic view. The number of bullish hedge fund bets shrunk by 3 in recent months. SpartanNash Company (NASDAQ:SPTN) was in 12 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 20. Our calculations also showed that SPTN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Roger Ibbotson of Zebra Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to go over the latest hedge fund action encompassing SpartanNash Company (NASDAQ:SPTN).
Do Hedge Funds Think SPTN Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the second quarter of 2020. On the other hand, there were a total of 20 hedge funds with a bullish position in SPTN a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in SpartanNash Company (NASDAQ:SPTN) was held by Renaissance Technologies, which reported holding $27.6 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $5.2 million position. Other investors bullish on the company included AQR Capital Management, Two Sigma Advisors, and Millennium Management. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to SpartanNash Company (NASDAQ:SPTN), around 0.48% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to SPTN.
Due to the fact that SpartanNash Company (NASDAQ:SPTN) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedge funds who were dropping their entire stakes by the end of the third quarter. At the top of the heap, Mark Coe’s Intrinsic Edge Capital said goodbye to the biggest investment of the “upper crust” of funds watched by Insider Monkey, worth an estimated $9.6 million in stock. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $1 million worth. These moves are interesting, as aggregate hedge fund interest fell by 3 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as SpartanNash Company (NASDAQ:SPTN) but similarly valued. These stocks are Ambac Financial Group, Inc. (NYSE:AMBC), HomeStreet Inc (NASDAQ:HMST), Qutoutiao Inc. (NASDAQ:QTT), First Foundation Inc (NASDAQ:FFWM), El Pollo LoCo Holdings Inc (NASDAQ:LOCO), Premier Financial Corp. (NASDAQ:PFC), and America’s Car-Mart, Inc. (NASDAQ:CRMT). This group of stocks’ market values resemble SPTN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMBC | 15 | 61070 | -1 |
| HMST | 11 | 34030 | -2 |
| QTT | 5 | 1760 | 0 |
| FFWM | 17 | 50800 | 3 |
| LOCO | 8 | 28594 | -2 |
| PFC | 13 | 46734 | 3 |
| CRMT | 9 | 63653 | -5 |
| Average | 11.1 | 40949 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $41 million in SPTN’s case. First Foundation Inc (NASDAQ:FFWM) is the most popular stock in this table. On the other hand Qutoutiao Inc. (NASDAQ:QTT) is the least popular one with only 5 bullish hedge fund positions. SpartanNash Company (NASDAQ:SPTN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SPTN is 49.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on SPTN as the stock returned 16.3% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
