Is Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) a buy here? Investors who are in the know are becoming more confident. The number of long hedge fund bets improved by 1 lately.
To most traders, hedge funds are viewed as worthless, outdated financial tools of the past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the masters of this club, around 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total asset base, and by keeping an eye on their best stock picks, we have formulated a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 (check out a sample of our picks).
Just as beneficial, positive insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are lots of motivations for an executive to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).
Consequently, it’s important to take a glance at the key action encompassing Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH).
What does the smart money think about Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH)?
In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Michael Price’s MFP Investors had the biggest position in Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH), worth close to $16 million, accounting for 2.3% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $1 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.
Consequently, key hedge funds were leading the bulls’ herd. SAC Capital Advisors, managed by Steven Cohen, established the biggest position in Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH). SAC Capital Advisors had 0 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0 million investment in the stock during the quarter.
Insider trading activity in Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH)
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH). These stocks are Ruby Tuesday, Inc. (NYSE:RT), Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL), Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG), Ignite Restaurant Group Inc (NASDAQ:IRG), and Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG). All of these stocks are in the restaurants industry and their market caps resemble RUTH’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Ruby Tuesday, Inc. (NYSE:RT)||13||0||5|
|Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL)||8||0||4|
|Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG)||3||1||0|
|Ignite Restaurant Group Inc (NASDAQ:IRG)||3||1||0|
|Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG)||7||2||0|
With the returns exhibited by our studies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) shareholders fit into this picture quite nicely.