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Hedge Fund Managers Love These Restaurant Stocks

Insider Monkey keeps its eyes on hedge fund managers as they’re the smartest investors around. They take into account risk as well as potential returns when making decisions. They evaluate the intrinsic value of stocks with state of the art models and strategies. They utilize massive amounts of data to follow and forecast the trends. Thus we believe individuals are more likely to beat the market by imitating insiders and hedge funds than trading against them. Insider Monkey tracks nearly 350 hedge funds. We present a list of top 8 restaurant stocks that hedge funds were holding in their portfolios at the end of Quarter 2 2011.

RENAISSANCE TECHNOLOGIES

Here’s a brief rundown of the top 8 stocks:

McDonald’s Corporation (MCD): Ranks as the most popular restaurant stock among the hedge funds we follow – MCD is also one of the sky walkers this year. The stock has returned 18% year to date and was owned by 34 hedge funds at the end of second quarter. Jim Simons’ Renaissance Technologies, which was the largest owner of MCD, increased its holding by 35% and had about 2.46 million shares (see billionaire Jim Simons’ favorite stocks).
Starbucks Corporation (SBUX): Strongly performed in Q2, SBUX was in the portfolios of 31 hedge funds and has returned 19% year to date. Glenn Russell Dubin’s Highbridge Capital Management held more shares than others. By the end of June, the firm had increased the position by 23% and possessed 3.25 million shares.
Yum! Brands, Inc. (YUM): Thirty hedge funds had YUM in their portfolios in the second quarter. The stock gained 9% year-to-date despite a sharp decline in July. Among the hedge funds we track, the biggest owner was Mason Hawkins’ Southeastern Asset Management with 26.28 million shares.
Chipotle Mexican Grill, Inc. (CMG): CMG is the best performed stock here, which has soared 46% since January. Twenty one hedge funds initiated CMG positions in Q2 and the biggest owner was Jim Simons’ Renaissance Technologies. The firm had 608 thousand shares, up 35% from first quarter.
Arcos Dorados Holdings Inc. (ARCO): ARCO was in the portfolios of 18 hedge funds. The stock has risen 26.30% since its IPO on April 14th. Glenn Russell Dubin’s Highbridge Capital Management owns the most shares among the hedge funds we follow, with nearly 19.5 million.
Darden Restaurants, Inc. (DRI): DRI has fluctuated for months and now it shows a slightly positive result of 1.6%. Thirteen hedge funds had DRI in their portfolio at the end of second quarter. Patrick McCormack’s Tiger Consumer Management decreased their position by 28% to 724 thousand shares, but still ranked as the biggest hedge fund owner.
Panera Bread Company (PNRA): PNRA had reached a really high price level in Q2, but it recognizes 10% year to date return due to later economic events. Thirteen hedge funds held the stock and Jim Simons’ Renaissance Technologies carried the most. The firm increased its holding by 9% and had 701 thousand shares at the end of June.
Tim Hortons Inc. (THI): THI has returned 14% year to date. In the second quarter, the stock was owned by 11 hedge funds with a comparatively smaller volume than the other stocks in this list. D. E. Shaw had the most with 197 thousand shares, unchanged since Q1 (see David Shaw’s favorite stocks).

Compared with SPY’s 6.10% YTD loss, these eight restaurant stocks all show positive results, and some even skyrocketed. As a group, the average return is 17.9%, which clearly beats the S&P 500 index.

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