In this article we will take a look at whether hedge funds think SYSCO Corporation (NYSE:SYY) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
SYSCO Corporation (NYSE:SYY) was in 42 hedge funds’ portfolios at the end of March. The all time high for this statistic is 42. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. SYY investors should pay attention to an increase in support from the world’s most elite money managers of late. There were 40 hedge funds in our database with SYY holdings at the end of December. Our calculations also showed that SYY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Nelson Peltz of Trian Partners
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Do Hedge Funds Think SYY Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SYY over the last 23 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, Trian Partners held the most valuable stake in SYSCO Corporation (NYSE:SYY), which was worth $1622.3 million at the end of the fourth quarter. On the second spot was Yacktman Asset Management which amassed $466.5 million worth of shares. Appaloosa Management LP, Candlestick Capital Management, and Arrowstreet Capital 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 Trian Partners allocated the biggest weight to SYSCO Corporation (NYSE:SYY), around 19.18% of its 13F portfolio. Jones Road Capital Management is also relatively very bullish on the stock, earmarking 7.11 percent of its 13F equity portfolio to SYY.
As aggregate interest increased, some big names have jumped into SYSCO Corporation (NYSE:SYY) headfirst. Candlestick Capital Management, managed by Jack Woodruff, established the largest position in SYSCO Corporation (NYSE:SYY). Candlestick Capital Management had $83.5 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $58.6 million investment in the stock during the quarter. The other funds with brand new SYY positions are D. E. Shaw’s D E Shaw, Peter Avellone’s Cartenna Capital, and Jinghua Yan’s TwinBeech Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as SYSCO Corporation (NYSE:SYY) but similarly valued. We will take a look at Sempra Energy (NYSE:SRE), Chipotle Mexican Grill, Inc. (NYSE:CMG), Lululemon Athletica inc. (NASDAQ:LULU), American International Group Inc (NYSE:AIG), Digital Realty Trust, Inc. (NYSE:DLR), HP Inc. (NYSE:HPQ), and Veeva Systems Inc (NYSE:VEEV). This group of stocks’ market caps are closest to SYY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SRE | 27 | 596834 | -6 |
| CMG | 41 | 3037666 | 6 |
| LULU | 41 | 751855 | -9 |
| AIG | 33 | 2471193 | -8 |
| DLR | 22 | 296357 | -1 |
| HPQ | 43 | 1526496 | 4 |
| VEEV | 39 | 966072 | 3 |
| Average | 35.1 | 1378068 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.1 hedge funds with bullish positions and the average amount invested in these stocks was $1378 million. That figure was $2719 million in SYY’s case. HP Inc. (NYSE:HPQ) is the most popular stock in this table. On the other hand Digital Realty Trust, Inc. (NYSE:DLR) is the least popular one with only 22 bullish hedge fund positions. SYSCO Corporation (NYSE:SYY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SYY is 84.6. 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately SYY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SYY were disappointed as the stock returned -5.1% since the end of March (through 6/18) 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.
Follow Sysco Corp (NYSE:SYY)
Follow Sysco Corp (NYSE:SYY)
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Disclosure: None. This article was originally published at Insider Monkey.
