Should You Avoid Denny’s Corporation (DENN)?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. At the top of the heap, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors said goodbye to the largest stake of all the investors followed by Insider Monkey, totaling an estimated $2 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also said goodbye to its stock, about $1.6 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Denny’s Corporation (NASDAQ:DENN) but similarly valued. These stocks are Scorpio Tankers Inc. (NYSE:STNG), TrueCar Inc (NASDAQ:TRUE), Ingles Markets, Incorporated (NASDAQ:IMKTA), and Carmike Cinemas, Inc. (NASDAQ:CKEC). This group of stocks’ market values are similar to DENN’s market value.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $121 million. That figure was $75 million in DENN’s case. Scorpio Tankers Inc. (NYSE:STNG) is the most popular stock in this table. On the other hand Ingles Markets, Incorporated (NASDAQ:IMKTA) is the least popular one with only 10 bullish hedge fund positions. Denny’s Corporation (NASDAQ:DENN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard STNG might be a better candidate to consider taking a long position in.

Disclosure: None