Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Flowers Foods, Inc. (NYSE:FLO).
Is FLO stock a buy or sell? Money managers were in a bearish mood. The number of bullish hedge fund bets were trimmed by 3 lately. Flowers Foods, Inc. (NYSE:FLO) was in 27 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 31. Our calculations also showed that FLO isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 30 hedge funds in our database with FLO holdings at the end of September.
Ric Dillon of Diamond Hill Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. With all of this in mind we're going to take a gander at the key hedge fund action regarding Flowers Foods, Inc. (NYSE:FLO).
Do Hedge Funds Think FLO Is A Good Stock To Buy Now?
At the end of December, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FLO over the last 22 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Flowers Foods, Inc. (NYSE:FLO) was held by Renaissance Technologies, which reported holding $125.6 million worth of stock at the end of December. It was followed by Diamond Hill Capital with a $52.4 million position. Other investors bullish on the company included Two Sigma Advisors, AQR Capital Management, and GAMCO Investors. In terms of the portfolio weights assigned to each position Quantinno Capital allocated the biggest weight to Flowers Foods, Inc. (NYSE:FLO), around 0.36% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, setting aside 0.25 percent of its 13F equity portfolio to FLO.
Seeing as Flowers Foods, Inc. (NYSE:FLO) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few hedgies who sold off their positions entirely last quarter. At the top of the heap, Steve Cohen's Point72 Asset Management said goodbye to the biggest stake of all the hedgies monitored by Insider Monkey, worth an estimated $2.2 million in stock. Parvinder Thiara's fund, Athanor Capital, also dumped its stock, about $0.5 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Flowers Foods, Inc. (NYSE:FLO). We will take a look at Boyd Gaming Corporation (NYSE:BYD), Synovus Financial Corp. (NYSE:SNV), Pilgrim's Pride Corporation (NASDAQ:PPC), Penske Automotive Group, Inc. (NYSE:PAG), Builders FirstSource, Inc. (NASDAQ:BLDR), Cirrus Logic, Inc. (NASDAQ:CRUS), and Bloom Energy Corporation (NYSE:BE). This group of stocks' market values are closest to FLO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BYD,28,275982,0 SNV,33,157470,8 PPC,17,80484,-1 PAG,21,114199,3 BLDR,37,755250,-1 CRUS,28,472627,2 BE,19,169159,2 Average,26.1,289310,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.1 hedge funds with bullish positions and the average amount invested in these stocks was $289 million. That figure was $289 million in FLO's case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand Pilgrim's Pride Corporation (NASDAQ:PPC) is the least popular one with only 17 bullish hedge fund positions. Flowers Foods, Inc. (NYSE:FLO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FLO is 53.1. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately FLO wasn't nearly as popular as these 30 stocks and hedge funds that were betting on FLO were disappointed as the stock returned 7.8% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.