We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of The Kroger Co. (NYSE:KR).
The Kroger Co. (NYSE:KR) saw an increase in support from the world’s most elite money managers during the third quarter. At the end of September, there were 40 funds in our database holding shares of Kroger, versus 35 funds a quarter earlier. However, 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 Carnival plc (ADR) (NYSE:CUK), Travelers Companies Inc (NYSE:TRV), and Ecolab Inc. (NYSE:ECL) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s check out the recent action regarding The Kroger Co. (NYSE:KR).
Hedge fund activity in The Kroger Co. (NYSE:KR)
As mentioned at the beginning of this article, 40 funds tracked by Insider Monkey were long The Kroger Co., which represents an increase of 14% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies has the most valuable position in The Kroger Co. (NYSE:KR), worth close to $177 million, amounting to 0.3% of its total 13F portfolio. The second largest stake is held by Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $153.1 million position; 0.7% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish contain Steven Richman’s East Side Capital (RR Partners), Israel Englander’s Millennium Management, and Cliff Asness’ AQR Capital Management.
Now, specific money managers were leading the bulls’ herd. OZ Management, led by Daniel S. Och, created the most outsized position in The Kroger Co. (NYSE:KR). OZ Management had $14.5 million invested in the company at the end of the quarter. Adam Weiss’s Stillwater Investment Management also initiated a $12 million position during the quarter. The other funds with new positions in the stock are Gregg Moskowitz’s Interval Partners, Ray Dalio’s Bridgewater Associates, and Leighton Welch’s Welch Capital Partners.
Let’s go over hedge fund activity in other stocks similar to The Kroger Co. (NYSE:KR). We will take a look at Carnival plc (ADR) (NYSE:CUK), Travelers Companies Inc (NYSE:TRV), Ecolab Inc. (NYSE:ECL), and Cognizant Technology Solutions Corp (NASDAQ:CTSH). This group of stocks’ market values resemble KR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CUK | 10 | 41201 | -1 |
| TRV | 30 | 542088 | 1 |
| ECL | 24 | 2407189 | -1 |
| CTSH | 47 | 1355422 | 7 |
As you can see these stocks had an average of 28 funds with bullish positions and the average amount invested in these stocks was $1.09 billion, which is higher than the $946 million in KR’s case. Cognizant Technology Solutions Corp (NASDAQ:CTSH) is the most popular stock in this table, while Carnival plc (ADR) (NYSE:CUK) is the least popular one with only 10 bullish hedge fund positions. The Kroger Co. (NYSE:KR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Cognizant Technology Solutions Corp (NASDAQ:CTSH) might be a better candidate to consider a long position.
