As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about SunOpta, Inc. (USA) (NASDAQ:STKL) in this article.
SunOpta, Inc. (USA) (NASDAQ:STKL) has experienced an increase in activity from the world’s largest hedge funds in recent months. STKL was in 20 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with STKL positions at the end of the previous quarter. 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 GenMark Diagnostics, Inc (NASDAQ:GNMK), NewBridge Bancorp (NASDAQ:NBBC), and Neos Therapeutics Inc (NASDAQ:NEOS) to gather more data points.
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According to most investors, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading today, Our experts hone in on the leaders of this club, approximately 700 funds. These investment experts preside over the lion’s share of the smart money’s total capital, and by watching their highest performing equity investments, Insider Monkey has identified several investment strategies that have historically outpaced the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, let’s take a gander at the new action surrounding SunOpta, Inc. (USA) (NASDAQ:STKL).
How are hedge funds trading SunOpta, Inc. (USA) (NASDAQ:STKL)?
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Tourbillon Capital Partners, managed by Jason Karp, holds the biggest position in SunOpta, Inc. (USA) (NASDAQ:STKL). Tourbillon Capital Partners has a $41.4 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Greg Boland’s West Face Capital, with a $41.2 million position; the fund has 17.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism include Mariko Gordon’s Daruma Asset Management, Chuck Royce’s Royce & Associates and Jim Simons’ Renaissance Technologies.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the biggest position in SunOpta, Inc. (USA) (NASDAQ:STKL). Millennium Management had $0.8 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors also initiated a $0.8 million position during the quarter. The other funds with new positions in the stock are Peter Muller’s PDT Partners, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as SunOpta, Inc. (USA) (NASDAQ:STKL) but similarly valued. These stocks are GenMark Diagnostics, Inc (NASDAQ:GNMK), NewBridge Bancorp (NASDAQ:NBBC), Neos Therapeutics Inc (NASDAQ:NEOS), and Potbelly Corp (NASDAQ:PBPB). This group of stocks’ market valuations are closest to STKL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GNMK | 12 | 58331 | -1 |
| NBBC | 10 | 65003 | 4 |
| NEOS | 9 | 53284 | 9 |
| PBPB | 15 | 34756 | -4 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $139 million in STKL’s case. Potbelly Corp (NASDAQ:PBPB) is the most popular stock in this table with 15 funds holding shares. On the other hand Neos Therapeutics Inc (NASDAQ:NEOS) is the least popular one. Compared to these stocks SunOpta, Inc. (USA) (NASDAQ:STKL) 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.
