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Are Hedge Funds On To Something With Texas Roadhouse Inc (TXRH)?

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It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Texas Roadhouse Inc (NASDAQ:TXRH).

Texas Roadhouse Inc (NASDAQ:TXRH) investors should be aware of an increase in hedge fund interest recently. TXRH was in 21 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with TXRH positions at the end of the previous quarter. At the end of this article we will also compare TXRH to other stocks including Ubiquiti Networks Inc (NASDAQ:UBNT), First Horizon National Corporation (NYSE:FHN), and Huntsman Corporation (NYSE:HUN) to get a better sense of its popularity.

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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.

Nadezhda1906/Shutterstock.com

Nadezhda1906/Shutterstock.com

How have hedgies been trading Texas Roadhouse Inc (NASDAQ:TXRH)?

At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 50% surge from the previous quarter, and a nearly 100% surge over the past 2 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

HedgeFundSentimentChart

When looking at the institutional investors followed by Insider Monkey, Steven Richman’s East Side Capital (RR Partners) has the most valuable position in Texas Roadhouse Inc (NASDAQ:TXRH), worth close to $45.9 million, comprising 2.2% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which holds a $43.3 million position. Other hedge funds and institutional investors that are bullish encompass Dmitry Balyasny’s Balyasny Asset Management, Cliff Asness’ AQR Capital Management and Gabriel Plotkin’s Melvin Capital Management.

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