Is Sonoco Products Company (NYSE:SON) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Sonoco Products Company (NYSE:SON) investors should be aware of an increase in enthusiasm from smart money lately. Sonoco Products Company (NYSE:SON) was in 25 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that SON isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
At the moment there are numerous gauges stock traders use to value their holdings. Some of the most underrated gauges are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the top money managers can beat the market by a superb margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Mario Gabelli of GAMCO Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. 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 homepage. Keeping this in mind we’re going to take a gander at the key hedge fund action surrounding Sonoco Products Company (NYSE:SON).
Do Hedge Funds Think SON Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SON over the last 23 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, Impax Asset Management held the most valuable stake in Sonoco Products Company (NYSE:SON), which was worth $60.9 million at the end of the fourth quarter. On the second spot was AQR Capital Management which amassed $22.3 million worth of shares. Renaissance Technologies, Sandbar Asset Management, and GAMCO Investors 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 Sandbar Asset Management allocated the biggest weight to Sonoco Products Company (NYSE:SON), around 1.7% of its 13F portfolio. Arjuna Capital is also relatively very bullish on the stock, designating 1.12 percent of its 13F equity portfolio to SON.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Sandbar Asset Management, managed by Michael Cowley, established the most valuable position in Sonoco Products Company (NYSE:SON). Sandbar Asset Management had $12.8 million invested in the company at the end of the quarter. Farnum Brown and Adam Seitchik’s Arjuna Capital also made a $2.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Eisner’s Engineers Gate Manager, Dmitry Balyasny’s Balyasny Asset Management, and Michael Gelband’s ExodusPoint Capital.
Let’s now review hedge fund activity in other stocks similar to Sonoco Products Company (NYSE:SON). We will take a look at MDU Resources Group Inc (NYSE:MDU), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Affiliated Managers Group, Inc. (NYSE:AMG), Dada Nexus Limited (NASDAQ:DADA), Landstar System, Inc. (NASDAQ:LSTR), Ionis Pharmaceuticals, Inc. (NASDAQ:IONS), and Elbit Systems Ltd. (NASDAQ:ESLT). This group of stocks’ market caps match SON’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDU | 21 | 162814 | 1 |
| WSC | 47 | 1271017 | 12 |
| AMG | 26 | 725024 | -1 |
| DADA | 21 | 157587 | -4 |
| LSTR | 15 | 166365 | -3 |
| IONS | 23 | 541031 | -5 |
| ESLT | 3 | 50211 | -2 |
| Average | 22.3 | 439150 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $439 million. That figure was $158 million in SON’s case. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is the most popular stock in this table. On the other hand Elbit Systems Ltd. (NASDAQ:ESLT) is the least popular one with only 3 bullish hedge fund positions. Sonoco Products Company (NYSE:SON) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SON is 60.9. 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 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately SON wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SON were disappointed as the stock returned 7% since the end of March (through 7/9) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
