We can judge whether TreeHouse Foods Inc. (NYSE:THS) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
In TreeHouse Foods Inc. (NYSE:THS)’s case, it looks like hedge funds are in a bearish mood as the number of long bets slid by three during the third quarter. In this way, there were 21 funds in our database bullish on the stock at the end of September. At the end of this article we will also compare THS to other stocks including Robert Half International Inc. (NYSE:RHI), Axis Capital Holdings Limited (NYSE:AXS), and People’s United Financial, Inc. (NASDAQ:PBCT) to get a better sense of its popularity.
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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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Keeping this in mind, we’re going to analyze the new action encompassing TreeHouse Foods Inc. (NYSE:THS).
Hedge fund activity in TreeHouse Foods Inc. (NYSE:THS)
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on TreeHouse Foods, down by 13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in THS over the last five quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Steve Cohen’s Point72 Asset Management holds the number one position in TreeHouse Foods Inc. (NYSE:THS). Point72 Asset Management has a $98.7 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is Fisher Asset Management, led by Ken Fisher, which holds a $62 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions include Philip Hilal’s Clearfield Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Due to the fact that TreeHouse Foods Inc. (NYSE:THS) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few hedgies that decided to sell off their full holdings in the third quarter. At the top of the heap, Millennium Management, one of the largest hedge funds in the world, said goodbye to the largest position of all the hedgies followed by Insider Monkey, valued at close to $147.9 million in stock, and Michael A. Price and Amos Meron’s Empyrean Capital Partners was right behind this move, as the fund dumped about $39.5 million worth of shares.
Let’s go over hedge fund activity in other stocks similar to TreeHouse Foods Inc. (NYSE:THS). These stocks are Robert Half International Inc. (NYSE:RHI), Axis Capital Holdings Limited (NYSE:AXS), People’s United Financial, Inc. (NASDAQ:PBCT), and Toll Brothers Inc (NYSE:TOL). This group of stocks’ market caps are closest to THS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RHI | 21 | 252953 | -5 |
| AXS | 13 | 482259 | 2 |
| PBCT | 12 | 54291 | -5 |
| TOL | 29 | 329585 | 1 |
As you can see these stocks had an average of 19 funds with bullish positions and the average amount invested in these stocks was $280 million. That figure was $298 million in THS’s case. Toll Brothers Inc (NYSE:TOL) is the most popular stock in this table, with 29 funds holding shares. On the other hand People’s United Financial, Inc. (NASDAQ:PBCT) is the least popular one with only 12 bullish hedge fund positions. TreeHouse Foods Inc. (NYSE:THS) 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 Toll Brothers Inc (NYSE:TOL) might be a better candidate to consider taking a long position in.
Disclosure: none
