TreeHouse Foods Inc. (THS): Are Hedge Funds Right About This Stock?: J&J Snack Foods Corp. (JJSF), B&G Foods, Inc. (BGS)

TreeHouse Foods Inc. (NYSE:THS) investors should pay attention to a decrease in enthusiasm from smart money in recent months.

At the moment, there are tons of methods investors can use to analyze Mr. Market. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can beat their index-focused peers by a healthy margin (see just how much).

Equally as integral, optimistic insider trading sentiment is another way to break down the stock market universe. Obviously, there are a variety of reasons for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if you understand what to do (learn more here).

Now, we’re going to take a look at the latest action surrounding TreeHouse Foods Inc. (NYSE:THS).

What does the smart money think about TreeHouse Foods Inc. (NYSE:THS)?

Heading into 2013, a total of 11 of the hedge funds we track were bullish in this stock, a change of -21% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully.

Of the funds we track, Ken Fisher’s Fisher Asset Management had the largest position in TreeHouse Foods Inc. (NYSE:THS), worth close to $47.7 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Keith Meister of Corvex Capital, with a $9.8 million position; 0.5% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Bill Miller’s Legg Mason Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Ken Griffin’s Citadel Investment Group.

Due to the fact that TreeHouse Foods Inc. (NYSE:THS) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedgies that decided to sell off their positions entirely in Q4. It’s worth mentioning that Clint Carlson’s Carlson Capital sold off the biggest stake of the “upper crust” of funds we monitor, comprising close to $14.3 million in stock.. Noam Gottesman’s fund, GLG Partners, also dropped its call options., about $6.3 million worth. These moves are important to note, as total hedge fund interest fell by 3 funds in Q4.

How are insiders trading TreeHouse Foods Inc. (NYSE:THS)?

Insider buying is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time frame, TreeHouse Foods Inc. (NYSE:THS) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to TreeHouse Foods Inc. (NYSE:THS). These stocks are J&J Snack Foods Corp. (NASDAQ:JJSF), B&G Foods, Inc. (NYSE:BGS), Snyder S Lance Inc (NASDAQ:LNCE), The Hain Celestial Group, Inc. (NASDAQ:HAIN), and Gruma S.A.B. de C.V. (ADR) (NYSE:GMK). This group of stocks are the members of the processed & packaged goods industry and their market caps are closest to THS’s market cap.

With the results exhibited by the aforementioned studies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and TreeHouse Foods Inc. (NYSE:THS) is an important part of this process.

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