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Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL): Hedge Funds Are Bearish and Insiders Are Bullish, What Should You Do?

Is Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) a marvelous investment today? The smart money is in a pessimistic mood. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience.

Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)

At the moment, there are dozens of gauges investors can use to analyze their holdings. A pair of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite money managers can outpace the S&P 500 by a solid margin (see just how much).

Equally as beneficial, optimistic insider trading activity is a second way to parse down the investments you’re interested in. There are a variety of reasons for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this tactic if shareholders know where to look (learn more here).

Now, let’s take a gander at the recent action regarding Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL).

What have hedge funds been doing with Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)?

In preparation for this year, a total of 14 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), worth close to $19 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Force Capital, managed by Robert Jaffe, which held a $13 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Joel Greenblatt’s Gotham Asset Management.

Due to the fact that Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) has faced falling interest from hedge fund managers, it’s easy to see that there were a few hedge funds that elected to cut their positions entirely heading into 2013. It’s worth mentioning that Israel Englander’s Millennium Management cut the largest position of the “upper crust” of funds we key on, valued at close to $5 million in stock., and Neil Chriss of Hutchin Hill Capital was right behind this move, as the fund sold off about $3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)

Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest half-year time frame, Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) has experienced 2 unique insiders buying, and 7 insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s time-tested strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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