Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Tyson Foods, Inc. (NYSE:TSN).
Is TSN a good stock to buy? Tyson Foods, Inc. (NYSE:TSN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 33 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that TSN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare TSN to other stocks including AMETEK, Inc. (NYSE:AME), Genmab A/S (NASDAQ:GMAB), and Stanley Black & Decker, Inc. (NYSE:SWK) to get a better sense of its popularity.
Bernard Horn of Polaris Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a look at the key hedge fund action regarding Tyson Foods, Inc. (NYSE:TSN).
Do Hedge Funds Think TSN Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TSN over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
More specifically, Yacktman Asset Management was the largest shareholder of Tyson Foods, Inc. (NYSE:TSN), with a stake worth $214.8 million reported as of the end of September. Trailing Yacktman Asset Management was AQR Capital Management, which amassed a stake valued at $119.7 million. Millennium Management, GLG Partners, and Polaris 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 Appian Way Asset Management allocated the biggest weight to Tyson Foods, Inc. (NYSE:TSN), around 7.66% of its 13F portfolio. Yacktman Asset Management is also relatively very bullish on the stock, setting aside 2.07 percent of its 13F equity portfolio to TSN.
Judging by the fact that Tyson Foods, Inc. (NYSE:TSN) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers who were dropping their entire stakes in the third quarter. Intriguingly, John Overdeck and David Siegel’s Two Sigma Advisors dropped the biggest stake of the 750 funds monitored by Insider Monkey, totaling an estimated $27.9 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund dumped about $7.9 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Tyson Foods, Inc. (NYSE:TSN) but similarly valued. We will take a look at AMETEK, Inc. (NYSE:AME), Genmab A/S (NASDAQ:GMAB), Stanley Black & Decker, Inc. (NYSE:SWK), Chewy, Inc. (NYSE:CHWY), United Microelectronics Corp (NYSE:UMC), Eversource Energy (NYSE:ES), and Las Vegas Sands Corp. (NYSE:LVS). This group of stocks’ market caps match TSN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AME | 38 | 1320239 | 0 |
| GMAB | 9 | 122715 | 0 |
| SWK | 37 | 776002 | -7 |
| CHWY | 32 | 376172 | -11 |
| UMC | 13 | 151038 | 3 |
| ES | 21 | 137293 | -5 |
| LVS | 40 | 938057 | -8 |
| Average | 27.1 | 545931 | -4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $546 million. That figure was $865 million in TSN’s case. Las Vegas Sands Corp. (NYSE:LVS) is the most popular stock in this table. On the other hand Genmab A/S (NASDAQ:GMAB) is the least popular one with only 9 bullish hedge fund positions. Tyson Foods, Inc. (NYSE:TSN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TSN is 60.8. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately TSN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TSN were disappointed as the stock returned 0.6% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Tyson Foods Inc. (NYSE:TSN)
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Disclosure: None. This article was originally published at Insider Monkey.
