Is Bloomin' Brands Inc (NASDAQ:BLMN) the right pick for your portfolio? The smart money is taking a bullish view. The number of bullish hedge fund positions rose by 3 recently.
In the eyes of most stock holders, hedge funds are seen as underperforming, old financial vehicles of the past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the bigwigs of this group, close to 450 funds. Most estimates calculate that this group has its hands on the lion's share of the hedge fund industry's total asset base, and by watching their best investments, we have uncovered a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 (check out a sample of our picks).
Equally as beneficial, bullish insider trading activity is a second way to parse down the world of equities. There are a variety of stimuli for an executive to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this method if you understand where to look (learn more here).
Now, we're going to take a look at the latest action regarding Bloomin' Brands Inc (NASDAQ:BLMN).
In preparation for this quarter, a total of 12 of the hedge funds we track held long positions in this stock, a change of 33% 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 boosting their stakes significantly.
When looking at the hedgies we track, Drew Cupps's Cupps Capital Management had the most valuable position in Bloomin' Brands Inc (NASDAQ:BLMN), worth close to $9.2 million, accounting for 0.9% of its total 13F portfolio. Coming in second is Glenhill Advisors, managed by Glenn J. Krevlin, which held a $8.6 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include David Keidan's Buckingham Capital Management, Ken Griffin's Citadel Investment Group and Israel Englander's Millennium Management.
As aggregate interest increased, specific money managers were leading the bulls' herd. Cupps Capital Management, managed by Drew Cupps, assembled the largest position in Bloomin' Brands Inc (NASDAQ:BLMN). Cupps Capital Management had 9.2 million invested in the company at the end of the quarter. David Keidan's Buckingham Capital Management also made a $4.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Jeffrey Vinik's Vinik Asset Management, Steven Cohen's SAC Capital Advisors, and Neil Chriss's Hutchin Hill Capital.
Insider trading activity, especially when it's bullish, is best served when the company in focus has seen transactions within the past 180 days. Over the latest half-year time frame, Bloomin' Brands Inc (NASDAQ:BLMN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to Bloomin' Brands Inc (NASDAQ:BLMN). These stocks are Arcos Dorados Holding Inc (NYSE:ARCO), Brinker International, Inc. (NYSE:EAT), Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), The Cheesecake Factory Incorporated (NASDAQ:CAKE), and The Wendy's Company (NASDAQ:WEN). This group of stocks are the members of the restaurants industry and their market caps match BLMN's market cap.