DineEquity Inc (NYSE:DIN) shareholders have witnessed an increase in support from the world’s most elite money managers recently.
If you’d ask most traders, hedge funds are seen as unimportant, old investment tools of the past. While there are over 8000 funds in operation today, we at Insider Monkey hone in on the elite of this group, about 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total asset base, and by watching their top picks, we have spotted a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as key, bullish insider trading activity is another way to break down the financial markets. Obviously, there are lots of incentives for a bullish insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this method if shareholders know what to do (learn more here).
Now, we’re going to take a glance at the recent action surrounding DineEquity Inc (NYSE:DIN).
How are hedge funds trading DineEquity Inc (NYSE:DIN)?
Heading into 2013, a total of 19 of the hedge funds we track were bullish in this stock, a change of 36% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully.
According to our comprehensive database, Mason Hawkins’s Southeastern Asset Management had the most valuable position in DineEquity Inc (NYSE:DIN), worth close to $175.9 million, accounting for 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is MSD Capital, managed by Glenn Fuhrman and John Phelan, which held a $157.6 million position; 32.8% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include James Crichton and Adam Weiss’s Scout Capital Management, Richard McGuire’s Marcato Capital Management and Richard Chilton’s Chilton Investment Company.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Taconic Capital, managed by Frank Brosens, initiated the most valuable position in DineEquity Inc (NYSE:DIN). Taconic Capital had 6.7 million invested in the company at the end of the quarter. Robert Jaffe’s Force Capital also initiated a $1.7 million position during the quarter. The other funds with brand new DIN positions are Sean Cullinan’s Point State Capital, Steven Cohen’s SAC Capital Advisors, and David Costen Haley’s HBK Investments.
What do corporate executives and insiders think about DineEquity Inc (NYSE:DIN)?
Insider buying is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest half-year time period, DineEquity Inc (NYSE:DIN) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to DineEquity Inc (NYSE:DIN). These stocks are Buffalo Wild Wings (NASDAQ:BWLD), Jack in the Box Inc. (NASDAQ:JACK), Bob Evans Farms Inc (NASDAQ:BOBE), Texas Roadhouse Inc (NASDAQ:TXRH), and Papa John’s Int’l, Inc. (NASDAQ:PZZA). This group of stocks are the members of the restaurants industry and their market caps are closest to DIN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Buffalo Wild Wings (NASDAQ:BWLD) | 17 | 0 | 9 |
| Jack in the Box Inc. (NASDAQ:JACK) | 15 | 1 | 9 |
| Bob Evans Farms Inc (NASDAQ:BOBE) | 7 | 2 | 1 |
| Texas Roadhouse Inc (NASDAQ:TXRH) | 14 | 1 | 5 |
| Papa John’s Int’l, Inc. (NASDAQ:PZZA) | 11 | 1 | 5 |
With the returns exhibited by our strategies, everyday investors must always watch hedge fund and insider trading sentiment, and DineEquity Inc (NYSE:DIN) is an important part of this process.
