A big bet on chicken helped at least one hedge fund manager hedge today’s market movement
What’s got feathers, lays eggs and happened to hedge today’s market movement? Chicken. Pilgrim’s Pride Corporation (PPC) popped almost 10% today, easily avoiding today’s downward pressure on the S&P and US markets.
Pilgrim’s Pride was coming off of a terrific year. Up more than 100% over the course of 2014, Pilgrim’s handily outpaced the performance of the Consumer Staples sector ETF, XLP, which was up almost 14.2% over the same period.
One of the largest hedge fund holders of PPC in the Symmetric universe is Quotient Investors, managed by Julia Peter-Kerr. They hold more than $13m in PPC shares, a position they initiated just over one year ago and increased during the last reporting period. More important, it’s a meaningful position for them -- PPC represents 2.9% of their reported holdings. Today’s 10% move in PPC would raise their publicly disclosed portfolio almost thirty basis points -- a meaningful impact to their overall performance.
Quotient Investors happens to be known for their stock picking skill. The fund description illustrates a team-ethic focused on picking stocks that will outperform their respective sectors. Some managers are better at this than others. Quotient Investors happens to be in the top 25% of managers for stock picking skill in the Symmetric universe. It also happens to be in the top 25% for consumer staples stocks.
Turn to Gargoyle Investment Advisors. Run by Charles Goodgal, Gargoyle owned almost $6.5m of PPC shares as of the end of Q3 -- just under half the position size as Quotient Investors. They are the fifteenth-largest hedge fund owner of PPC, but at 2.4% of their disclosed portfolio, they expressed almost as much conviction in PPC as Quotient and should see a similar contribution to returns from today’s move.
Acadian, Vanguard, JP Morgan. Even Gotham Asset Management, the largest hedge fund holder of PPC, at $68.7m. They may have been the biggest holders, but PPC is a minor position. It’s only .7% of Gotham’s publicly disclosed portfolio, for example -- less than a quarter the scale of Quotient’s position. It’s fair to say, they probably didn’t have quite as good a day with PPC as Quotient or Gargoyle Investment Advisors.
PPC was up more than its benchmark was up for much of 2014. Today, PPC was up an additional 9.6%, putting it well ahead of it’s benchmark, XLP. Those who held meaningful positions in PPC will see their Symmetric Stock Picking Skill scores increase.
For tear-sheets and in-depth analysis of the funds and companies mentioned in this article, go to symmetric.io, or:
Gargoyle Investment Advisors
