Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in the major indices. In this article, we will take a closer look at hedge fund sentiment towards Post Holdings Inc (NYSE:POST).
Is Post Holdings Inc (NYSE:POST) a good investment now? The smart money is turning bullish. The number of long hedge fund bets advanced by 13 in recent months. Post Holdings Inc (NYSE:POST) was in 41 hedge funds’ portfolios at the end of September. There were 28 hedge funds in our database with Post Holdings Inc (NYSE:POST) positions at the end of the previous quarter. At the end of this article, we will also compare Post Holdings Inc (NYSE:POST) to other stocks, including Sprouts Farmers Market Inc (NASDAQ:SFM), Two Harbors Investment Corp (NYSE:TWO), and Cleco Corporation (NYSE:CNL) to get a better sense of its popularity.
Follow Post Holdings Inc. (NYSE:POST)
Follow Post Holdings Inc. (NYSE:POST)
In the financial world, there are a lot of indicators stock traders put to use to analyze publicly traded companies. A couple of the most useful indicators are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the top money managers can beat the market by a healthy margin (see the details here).
With all of this in mind, let’s check out the key action encompassing Post Holdings Inc (NYSE:POST).
How have hedgies been trading Post Holdings Inc (NYSE:POST)?
At the end of the third quarter, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 46% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Paulson & Co, managed by John Paulson, holds the number one position in Post Holdings Inc (NYSE:POST). Paulson & Co has a $219 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Blue Ridge Capital, led by John Griffin, holding a $153.4 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions comprise William Duhamel’s Route One Investment Company, and D E Shaw.
With a general bullishness amongst the heavyweights, key money managers have jumped into Post Holdings Inc (NYSE:POST) headfirst. Ratan Capital Group, managed by Nehal Chopra, assembled the largest position in Post Holdings Inc (NYSE:POST). Ratan Capital Group had $76.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $41.5 million investment in the stock during the quarter. The following funds were also among the new POST investors: Renaissance Technologies, Benjamin A. Smith’s Laurion Capital Management, and Peter Muller’s PDT Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Post Holdings Inc (NYSE:POST) but similarly valued. These stocks are Sprouts Farmers Market Inc (NASDAQ:SFM), Two Harbors Investment Corp (NYSE:TWO), Cleco Corporation (NYSE:CNL), and Gulfport Energy Corporation (NASDAQ:GPOR). This group of stocks’ market valuations is similar to Post Holdings Inc (NYSE:POST)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SFM | 22 | 300705 | 8 |
| TWO | 19 | 136397 | -1 |
| CNL | 16 | 316698 | 1 |
| GPOR | 36 | 691739 | -7 |
As you can see, these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $361 million. That figure was $1.36 billion in Post Holdings Inc (NYSE:POST)’s case. Gulfport Energy Corporation (NASDAQ:GPOR) is the most popular stock in this table. On the other hand, Cleco Corporation (NYSE:CNL) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks, Post Holdings Inc (NYSE:POST) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
