Is The Hain Celestial Group, Inc. (NASDAQ:HAIN) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is The Hain Celestial Group, Inc. (NASDAQ:HAIN) the right investment to pursue these days? Money managers are becoming less confident. The number of bullish hedge fund bets shrunk by 8 lately. Our calculations also showed that HAIN isn’t among the 30 most popular stocks among hedge funds.
According to most investors, hedge funds are seen as unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds with their doors open at present, Our researchers look at the moguls of this club, approximately 750 funds. These investment experts manage the lion’s share of the hedge fund industry’s total asset base, and by tracking their unrivaled investments, Insider Monkey has deciphered numerous investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let’s take a look at the latest hedge fund action encompassing The Hain Celestial Group, Inc. (NASDAQ:HAIN).
How are hedge funds trading The Hain Celestial Group, Inc. (NASDAQ:HAIN)?
At the end of the first quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -38% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards HAIN over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Engaged Capital was the largest shareholder of The Hain Celestial Group, Inc. (NASDAQ:HAIN), with a stake worth $389.8 million reported as of the end of March. Trailing Engaged Capital was Permian Investment Partners, which amassed a stake valued at $48.6 million. Armistice Capital, GAMCO Investors, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as The Hain Celestial Group, Inc. (NASDAQ:HAIN) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there were a few hedgies that elected to cut their entire stakes heading into Q3. It’s worth mentioning that Joe Milano’s Greenhouse Funds dropped the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at about $17.2 million in stock, and Jim Simons’s Renaissance Technologies was right behind this move, as the fund sold off about $14.9 million worth. These transactions are important to note, as total hedge fund interest was cut by 8 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks similar to The Hain Celestial Group, Inc. (NASDAQ:HAIN). We will take a look at Werner Enterprises, Inc. (NASDAQ:WERN), Whiting Petroleum Corporation (NYSE:WLL), AAON, Inc. (NASDAQ:AAON), and Argo Group International Holdings, Ltd. (NYSE:ARGO). This group of stocks’ market caps resemble HAIN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WERN | 16 | 126925 | 2 |
| WLL | 25 | 360912 | -8 |
| AAON | 5 | 3625 | -1 |
| ARGO | 17 | 200431 | 4 |
| Average | 15.75 | 172973 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $492 million in HAIN’s case. Whiting Petroleum Corporation (NYSE:WLL) is the most popular stock in this table. On the other hand AAON, Inc. (NASDAQ:AAON) is the least popular one with only 5 bullish hedge fund positions. The Hain Celestial Group, Inc. (NASDAQ:HAIN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately HAIN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HAIN investors were disappointed as the stock returned -10.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
