Hedge Funds Are Betting On Einstein Noah Restaurant Group, Inc. (BAGL)

Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL) has experienced an increase in hedge fund sentiment of late.

If you’d ask most market participants, hedge funds are assumed to be worthless, outdated financial tools of years past. While there are more than 8000 funds in operation today, we look at the leaders of this group, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the smart money’s total capital, and by monitoring their highest performing equity investments, we have deciphered a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as important, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. There are plenty of reasons for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this tactic if piggybackers understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a peek at the latest action encompassing Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL).

What does the smart money think about Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL)?

In preparation for this quarter, a total of 9 of the hedge funds we track were long in this stock, a change of 13% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully.

According to our comprehensive database, Greenlight Capital, managed by David Einhorn, holds the most valuable position in Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL). Greenlight Capital has a $159.2 million position in the stock, comprising 2.4% of its 13F portfolio. On Greenlight Capital’s heels is Jim Simons of Renaissance Technologies, with a $4.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.

As one would reasonably expect, some big names were breaking ground themselves. Highbridge Capital Management, managed by Glenn Russell Dubin, established the largest position in Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL). Highbridge Capital Management had 0.4 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.2 million position during the quarter.

How have insiders been trading Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time frame, Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

With the returns exhibited by our strategies, retail investors must always monitor hedge fund and insider trading activity, and Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL) shareholders fit into this picture quite nicely.

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