We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 835 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is National Beverage Corp. (NASDAQ:FIZZ), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
National Beverage Corp. (NASDAQ:FIZZ) has seen an increase in activity from the world’s largest hedge funds of late. FIZZ was in 21 hedge funds’ portfolios at the end of the fourth quarter of 2019. There were 16 hedge funds in our database with FIZZ positions at the end of the previous quarter. Our calculations also showed that FIZZ isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In today’s marketplace there are dozens of tools investors put to use to analyze publicly traded companies. A couple of the most useful tools are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best money managers can trounce the S&P 500 by a solid amount (see the details here).
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a gander at the fresh hedge fund action surrounding National Beverage Corp. (NASDAQ:FIZZ).
Hedge fund activity in National Beverage Corp. (NASDAQ:FIZZ)
At Q4’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 31% from one quarter earlier. On the other hand, there were a total of 21 hedge funds with a bullish position in FIZZ a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of National Beverage Corp. (NASDAQ:FIZZ), with a stake worth $137.1 million reported as of the end of September. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $32.8 million. GMT Capital, Millennium Management, and Citadel Investment Group 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 Yost Capital Management allocated the biggest weight to National Beverage Corp. (NASDAQ:FIZZ), around 11.84% of its 13F portfolio. GMT Capital is also relatively very bullish on the stock, setting aside 0.98 percent of its 13F equity portfolio to FIZZ.
As industrywide interest jumped, some big names were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in National Beverage Corp. (NASDAQ:FIZZ). Balyasny Asset Management had $19 million invested in the company at the end of the quarter. Carson Yost’s Yost Capital Management also made a $15.1 million investment in the stock during the quarter. The following funds were also among the new FIZZ investors: David Harding’s Winton Capital Management, OZ Management, and Minhua Zhang’s Weld Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as National Beverage Corp. (NASDAQ:FIZZ) but similarly valued. These stocks are Invesco Mortgage Capital Inc (NYSE:IVR), Carpenter Technology Corporation (NYSE:CRS), Prospect Capital Corporation (NASDAQ:PSEC), and ExlService Holdings, Inc. (NASDAQ:EXLS). All of these stocks’ market caps match FIZZ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IVR | 15 | 85307 | -4 |
| CRS | 16 | 73936 | 2 |
| PSEC | 15 | 72643 | 3 |
| EXLS | 18 | 48631 | 2 |
| Average | 16 | 70129 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $309 million in FIZZ’s case. ExlService Holdings, Inc. (NASDAQ:EXLS) is the most popular stock in this table. On the other hand Invesco Mortgage Capital Inc (NYSE:IVR) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks National Beverage Corp. (NASDAQ:FIZZ) is more popular among hedge funds. 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 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th but still managed to beat the market by 4.2 percentage points. Hedge funds were also right about betting on FIZZ, though not to the same extent, as the stock returned -14.4% in 2020 (through April 6th) and outperformed the market as well.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
