This Metric Says You Are Smart to Buy Whole Foods Market, Inc. (WFM)

Is Whole Foods Market, Inc. (NASDAQ:WFM) a splendid investment now? Investors who are in the know are taking a bullish view. The number of bullish hedge fund bets went up by 4 lately.

In the eyes of most stock holders, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are over 8000 funds with their doors open today, we at Insider Monkey look at the upper echelon of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by watching their highest performing equity investments, we have come up with a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as beneficial, positive insider trading sentiment is a second way to break down the marketplace. Obviously, there are a number of stimuli for an insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the impressive potential of this tactic if piggybackers understand what to do (learn more here).

With all of this in mind, it’s important to take a glance at the recent action surrounding Whole Foods Market, Inc. (NASDAQ:WFM).

What does the smart money think about Whole Foods Market, Inc. (NASDAQ:WFM)?

Heading into Q2, a total of 39 of the hedge funds we track were bullish in this stock, a change of 11% from the first quarter.

As aggregate interest increased, some big names were breaking ground themselves. Tiger Consumer Management, managed by Patrick McCormack, initiated the biggest position in Whole Foods Market, Inc. (NASDAQ:WFM). Tiger Consumer Management had 71.5 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also initiated a $66.9 million position during the quarter. The other funds with new positions in the stock are Tony Chedraoui’s Tyrus Capital, Malcolm Fairbairn’s Ascend Capital, and SAC Subsidiary’s CR Intrinsic Investors.

What do corporate executives and insiders think about Whole Foods Market, Inc. (NASDAQ:WFM)?

Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest 180-day time period, Whole Foods Market, Inc. (NASDAQ:WFM) has seen 1 unique insiders purchasing, and 24 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Whole Foods Market, Inc. (NASDAQ:WFM). These stocks are Casey’s General Stores, Inc. (NASDAQ:CASY), Delhaize Group (ADR) (NYSE:DEG), Safeway Inc. (NYSE:SWY), Companhia Brasileira de Distrib. (ADR) (NYSE:CBD), and The Kroger Co. (NYSE:KR). This group of stocks are in the grocery stores industry and their market caps match WFM’s market cap.

With the results demonstrated by the aforementioned research, everyday investors should always monitor hedge fund and insider trading activity, and Whole Foods Market, Inc. (NASDAQ:WFM) is no exception.

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