Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like National Beverage Corp. (NASDAQ:FIZZ).
National Beverage Corp. (NASDAQ:FIZZ)has seen an increase in enthusiasm from smart money of late. There were 9 hedge funds in our database with FIZZ holdings at the end of the previous quarter. At the end of this article we will also compare FIZZ to other stocks including Prestige Brands Holdings, Inc. (NYSE:PBH), Metals USA Holdings Corp (NYSE:MUSA), and Owens-Illinois Inc (NYSE:OI) to get a better sense of its popularity.
Follow National Beverage Corp (NASDAQ:FIZZ)
Follow National Beverage Corp (NASDAQ:FIZZ)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, we’re going to take a look at the latest action encompassing National Beverage Corp. (NASDAQ:FIZZ).
What have hedge funds been doing with National Beverage Corp. (NASDAQ:FIZZ)?
Heading into the fourth quarter of 2016, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 122% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in FIZZ heading into this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies holds the number one position in National Beverage Corp. (NASDAQ:FIZZ). Renaissance Technologies has a $39.2 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, with a $20.6 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that are bullish include Alok Agrawal’s Bloom Tree Partners, and Carson Yost’s Yost Capital Management. We should note that Yost Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As industrywide interest jumped, some big names have been driving this bullishness. Bloom Tree Partners, led by Alok Agrawal, assembled the most valuable position in National Beverage Corp. (NASDAQ:FIZZ). Bloom Tree Partners had $14.1 million invested in the company at the end of the quarter. Andrew Sandler’s Sandler Capital Management also made a $13.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Carson Yost’s Yost Capital Management, Scott Scher & Michael Prober’s Clovis Capital Management, and Israel Englander’s Millennium Management.
Let’s now review hedge fund activity in other stocks similar to National Beverage Corp. (NASDAQ:FIZZ). We will take a look at Prestige Brands Holdings, Inc. (NYSE:PBH), Metals USA Holdings Corp (NYSE:MUSA), Owens-Illinois Inc (NYSE:OI), and Cimpress NV (NASDAQ:CMPR). This group of stocks’ market valuations are similar to FIZZ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PBH | 17 | 204942 | -1 |
| MUSA | 19 | 169461 | -4 |
| OI | 25 | 689067 | -2 |
| CMPR | 15 | 711157 | -1 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $444 million. That figure was $146 million in FIZZ’s case. Owens-Illinois Inc (NYSE:OI) is the most popular stock in this table. On the other hand Cimpress NV (NASDAQ:CMPR) is the least popular one with only 15 investors reporting long positions. National Beverage Corp. (NASDAQ:FIZZ) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Owens-Illinois Inc (NYSE:OI) might be a better candidate to consider taking a long position in.
