The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards TreeHouse Foods Inc. (NYSE:THS).
Is THS a good stock to buy? TreeHouse Foods Inc. (NYSE:THS) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 32. THS investors should be aware of a decrease in enthusiasm from smart money recently. There were 32 hedge funds in our database with THS holdings at the end of June. Our calculations also showed that THS 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.
In the eyes of most shareholders, hedge funds are assumed to be unimportant, old investment tools of yesteryear. While there are more than 8000 funds trading today, Our experts choose to focus on the elite of this group, about 850 funds. It is estimated that this group of investors direct bulk of the smart money’s total asset base, and by tracking their matchless stock picks, Insider Monkey has found numerous investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Paul Tudor Jones of Tudor Investment Corp
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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 let’s analyze the latest hedge fund action surrounding TreeHouse Foods Inc. (NYSE:THS).
Do Hedge Funds Think THS Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards THS over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of TreeHouse Foods Inc. (NYSE:THS), with a stake worth $53.2 million reported as of the end of September. Trailing Renaissance Technologies was Levin Easterly Partners, which amassed a stake valued at $44.5 million. Citadel Investment Group, Portolan Capital Management, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Levin Easterly Partners allocated the biggest weight to TreeHouse Foods Inc. (NYSE:THS), around 1.77% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, designating 1.34 percent of its 13F equity portfolio to THS.
Judging by the fact that TreeHouse Foods Inc. (NYSE:THS) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers who sold off their entire stakes in the third quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management cut the biggest stake of all the hedgies followed by Insider Monkey, totaling close to $21.3 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund cut about $1.1 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to TreeHouse Foods Inc. (NYSE:THS). These stocks are Focus Financial Partners Inc. (NASDAQ:FOCS), Apellis Pharmaceuticals, Inc. (NASDAQ:APLS), International Game Technology PLC (NYSE:IGT), MACOM Technology Solutions Holdings Inc (NASDAQ:MTSI), Ryder System, Inc. (NYSE:R), CNO Financial Group Inc (NYSE:CNO), and Primo Water Corporation (NYSE:PRMW). This group of stocks’ market valuations match THS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FOCS | 11 | 60571 | 2 |
| APLS | 29 | 515294 | 0 |
| IGT | 28 | 139844 | 5 |
| MTSI | 28 | 215078 | 5 |
| R | 19 | 232990 | -1 |
| CNO | 19 | 293710 | 1 |
| PRMW | 26 | 638608 | -5 |
| Average | 22.9 | 299442 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $299 million. That figure was $189 million in THS’s case. Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) is the most popular stock in this table. On the other hand Focus Financial Partners Inc. (NASDAQ:FOCS) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks TreeHouse Foods Inc. (NYSE:THS) is more popular among hedge funds. Our overall hedge fund sentiment score for THS is 81.1. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Unfortunately THS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on THS were disappointed as the stock returned 3.7% since the end of the third quarter (through 12/18) 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 most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
