Texas Roadhouse Inc (NASDAQ:TXRH) shareholders have witnessed an increase in hedge fund interest in recent months.
To most shareholders, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at present, we look at the moguls of this club, around 450 funds. It is estimated that this group has its hands on the majority of all hedge funds' total capital, and by monitoring their highest performing investments, we have figured out a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as integral, bullish insider trading activity is a second way to break down the financial markets. Just as you'd expect, there are lots of motivations for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).
Now, it's important to take a glance at the recent action surrounding Texas Roadhouse Inc (NASDAQ:TXRH).
At the end of the fourth quarter, a total of 14 of the hedge funds we track were bullish in this stock, a change of 27% from the previous quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings meaningfully.
Of the funds we track, Sigma Capital Management, managed by SAC Subsidiary, holds the largest position in Texas Roadhouse Inc (NASDAQ:TXRH). Sigma Capital Management has a $26 million position in the stock, comprising 1.4% of its 13F portfolio. On Sigma Capital Management's heels is Clint Carlson of Carlson Capital, with a $14 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Ken Griffin's Citadel Investment Group, Jeffrey Vinik's Vinik Asset Management and Steven Cohen's SAC Capital Advisors.
As aggregate interest increased, specific money managers have jumped into Texas Roadhouse Inc (NASDAQ:TXRH) headfirst. Carlson Capital, managed by Clint Carlson, initiated the most outsized position in Texas Roadhouse Inc (NASDAQ:TXRH). Carlson Capital had 14 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also made a $1 million investment in the stock during the quarter. The other funds with brand new TXRH positions are Glenn Russell Dubin's Highbridge Capital Management, Paul Tudor Jones's Tudor Investment Corp, and John Overdeck and David Siegel's Two Sigma Advisors.
Insider trading activity, especially when it's bullish, is at its handiest when the company in question has experienced transactions within the past six months. Over the last six-month time period, Texas Roadhouse Inc (NASDAQ:TXRH) has experienced 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey's strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Texas Roadhouse Inc (NASDAQ:TXRH) is no exception.
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