Tim Hortons Inc. (USA) (NYSE:THI) has experienced a decrease in enthusiasm from smart money lately.
To most market participants, hedge funds are assumed to be worthless, old investment tools of years past. While there are greater than 8000 funds trading at present, we hone in on the masters 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 capital, and by tracking their top stock picks, we have brought to light a number of 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 annum 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 24 percentage points in 7 months (see all of our picks from August).
Equally as beneficial, positive insider trading sentiment is another way to break down the investments you're interested in. As the old adage goes: there are lots of stimuli for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this method if "monkeys" know where to look (learn more here).
With these "truths" under our belt, it's important to take a gander at the key action encompassing Tim Hortons Inc. (USA) (NYSE:THI).
Heading into 2013, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Highfields Capital Management, managed by Jonathon Jacobson, holds the biggest position in Tim Hortons Inc. (USA) (NYSE:THI). Highfields Capital Management has a $118 million position in the stock, comprising 1.3% of its 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $10 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Israel Englander's Millennium Management, and Ken Griffin's Citadel Investment Group.
Because Tim Hortons Inc. (USA) (NYSE:THI) has witnessed declining sentiment from hedge fund managers, we can see that there lies a certain "tier" of money managers who sold off their positions entirely at the end of the year. Interestingly, Christian Leone's Luxor Capital Group sold off the largest investment of all the hedgies we monitor, totaling close to $214.2 million in stock.. SAC Subsidiary's fund, CR Intrinsic Investors, also cut its stock, about $4.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds at the end of the year.
Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past six months. Over the last six-month time frame, Tim Hortons Inc. (USA) (NYSE:THI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's check out hedge fund and insider activity in other stocks similar to Tim Hortons Inc. (USA) (NYSE:THI). These stocks are Domino's Pizza, Inc. (NYSE:DPZ), Dunkin Brands Group Inc (NASDAQ:DNKN), Darden Restaurants, Inc. (NYSE:DRI), Burger King Worldwide Inc (NYSE:BKW), and Chipotle Mexican Grill, Inc. (NYSE:CMG). All of these stocks are in the restaurants industry and their market caps match THI's market cap.