Is McDonald’s Corporation (MCD) Going to Burn These Hedge Funds?

Page 1 of 2

McDonald’s Corporation (NYSE:MCD) investors should be aware of a decrease in enthusiasm from smart money in recent months.

According to most stock holders, hedge funds are assumed to be unimportant, outdated financial vehicles of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey look at the crème de la crème of this club, around 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 top equity investments, we have revealed a few investment strategies that have historically outstripped the S&P 500 index. 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 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).

McDonald's Corporation (NYSE:MCD)

Equally as key, optimistic insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are lots of reasons for an insider to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if investors know where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the recent action encompassing McDonald’s Corporation (NYSE:MCD).

How have hedgies been trading McDonald’s Corporation (NYSE:MCD)?

Heading into Q2, a total of 43 of the hedge funds we track were long in this stock, a change of -12% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Michael Larson’s Bill & Melinda Gates Foundation Trust had the biggest position in McDonald’s Corporation (NYSE:MCD), worth close to $984.2 million, comprising 5.4% of its total 13F portfolio. Coming in second is Fisher Asset Management, managed by Ken Fisher, which held a $518.8 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Ric Dillon’s Diamond Hill Capital.

Since McDonald’s Corporation (NYSE:MCD) has experienced a declination in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds that elected to cut their entire stakes heading into Q2. It’s worth mentioning that Daniel S. Och’s OZ Management dumped the largest stake of the 450+ funds we watch, worth close to $32 million in stock.. John A. Levin’s fund, Levin Capital Strategies, also dropped its stock, about $23 million worth. These transactions are interesting, as total hedge fund interest dropped by 6 funds heading into Q2.

What have insiders been doing with McDonald’s Corporation (NYSE:MCD)?

Bullish insider trading is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time period, McDonald’s Corporation (NYSE:MCD) has experienced 1 unique insiders buying, and 9 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to McDonald’s Corporation (NYSE:MCD). These stocks are Darden Restaurants, Inc. (NYSE:DRI), Burger King Worldwide Inc (NYSE:BKW), Tim Hortons Inc. (USA) (NYSE:THI), Chipotle Mexican Grill, Inc. (NYSE:CMG), and Yum! Brands, Inc. (NYSE:YUM). All of these stocks are in the restaurants industry and their market caps resemble MCD’s market cap.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!