At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not The Chefs Warehouse, Inc (NASDAQ:CHEF) makes for a good investment right now.
The Chefs Warehouse, Inc (NASDAQ:CHEF) investors should pay attention to an increase in activity from the world's largest hedge funds of late. The Chefs Warehouse, Inc (NASDAQ:CHEF) was in 19 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 14 hedge funds in our database with CHEF positions at the end of the second quarter. Our calculations also showed that CHEF isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are viewed as slow, outdated investment vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, We look at the top tier of this group, around 850 funds. These investment experts shepherd the majority of all hedge funds' total capital, and by tailing their finest investments, Insider Monkey has determined many investment strategies that have historically outrun the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
David E. Shaw of D.E. Shaw
David E. Shaw of D.E. Shaw
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 let's analyze the new hedge fund action surrounding The Chefs Warehouse, Inc (NASDAQ:CHEF).
Do Hedge Funds Think CHEF Is A Good Stock To Buy Now?
At Q3's end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 36% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CHEF over the last 21 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Greenhouse Funds, managed by Joe Milano, holds the biggest position in The Chefs Warehouse, Inc (NASDAQ:CHEF). Greenhouse Funds has a $20.5 million position in the stock, comprising 3.1% of its 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which holds a $19.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Eli Cohen's Crescent Park Management, John Overdeck and David Siegel's Two Sigma Advisors and Renaissance Technologies. In terms of the portfolio weights assigned to each position Greenhouse Funds allocated the biggest weight to The Chefs Warehouse, Inc (NASDAQ:CHEF), around 3.13% of its 13F portfolio. Crescent Park Management is also relatively very bullish on the stock, setting aside 1.54 percent of its 13F equity portfolio to CHEF.
Consequently, key hedge funds were leading the bulls' herd. Crescent Park Management, managed by Eli Cohen, created the most outsized position in The Chefs Warehouse, Inc (NASDAQ:CHEF). Crescent Park Management had $9.2 million invested in the company at the end of the quarter. Anthony Joseph Vaccarino's North Fourth Asset Management also made a $4.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Thyra Zerhusen's Fairpointe Capital, Hoon Kim's Quantinno Capital, and Principal Global Investors's Columbus Circle Investors.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as The Chefs Warehouse, Inc (NASDAQ:CHEF) but similarly valued. We will take a look at Fluidigm Corporation (NASDAQ:FLDM), Poseida Therapeutics, Inc. (NASDAQ:PSTX), trivago N.V. (NASDAQ:TRVG), ACCO Brands Corporation (NYSE:ACCO), Summit Hotel Properties Inc (NYSE:INN), Aerie Pharmaceuticals Inc (NASDAQ:AERI), and Golden Ocean Group Ltd (NASDAQ:GOGL). This group of stocks' market values are similar to CHEF's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FLDM,27,152829,7 PSTX,12,69861,12 TRVG,8,48998,1 ACCO,14,25385,2 INN,9,8195,1 AERI,15,96347,-8 GOGL,5,65516,-2 Average,12.9,66733,1.9 [/table]
As you can see these stocks had an average of 12.9 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $87 million in CHEF's case. Fluidigm Corporation (NASDAQ:FLDM) is the most popular stock in this table. On the other hand Golden Ocean Group Ltd (NASDAQ:GOGL) is the least popular one with only 5 bullish hedge fund positions. The Chefs Warehouse, Inc (NASDAQ:CHEF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CHEF is 71.8. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on CHEF as the stock returned 60.2% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
