Texas Roadhouse Inc (NASDAQ:TXRH) was in 13 hedge funds’ portfolio at the end of the first quarter of 2013. TXRH investors should pay attention to a decrease in hedge fund sentiment lately. There were 16 hedge funds in our database with TXRH holdings at the end of the previous quarter.
To the average investor, there are plenty of gauges market participants can use to track Mr. Market. A pair of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can trounce the S&P 500 by a significant margin (see just how much).
Just as beneficial, bullish insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are lots of motivations for an executive to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a gander at the latest action surrounding Texas Roadhouse Inc (NASDAQ:TXRH).
What does the smart money think about Texas Roadhouse Inc (NASDAQ:TXRH)?
In preparation for this quarter, a total of 13 of the hedge funds we track were long in this stock, a change of -19% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Sigma Capital Management, managed by SAC Subsidiary, holds the biggest position in Texas Roadhouse Inc (NASDAQ:TXRH). Sigma Capital Management has a $26.8 million position in the stock, comprising 1.2% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $24.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Steven Cohen’s SAC Capital Advisors, Clint Carlson’s Carlson Capital and Israel Englander’s Millennium Management.
Judging by the fact that Texas Roadhouse Inc (NASDAQ:TXRH) has witnessed falling interest from the smart money, it’s safe to say that there exists a select few hedge funds that slashed their entire stakes in Q1. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the biggest investment of the 450+ funds we watch, comprising about $1.3 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund dropped about $1.1 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds in Q1.
Insider trading activity in Texas Roadhouse Inc (NASDAQ:TXRH)
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time period, Texas Roadhouse Inc (NASDAQ:TXRH) has experienced 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Texas Roadhouse Inc (NASDAQ:TXRH). These stocks are Bob Evans Farms Inc (NASDAQ:BOBE), Buffalo Wild Wings (NASDAQ:BWLD), Jack in the Box Inc. (NASDAQ:JACK), DineEquity Inc (NYSE:DIN), and Papa John’s Int’l, Inc. (NASDAQ:PZZA). This group of stocks belong to the restaurants industry and their market caps resemble TXRH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Bob Evans Farms Inc (NASDAQ:BOBE) | 10 | 2 | 2 |
| Buffalo Wild Wings (NASDAQ:BWLD) | 17 | 0 | 12 |
| Jack in the Box Inc. (NASDAQ:JACK) | 21 | 1 | 9 |
| DineEquity Inc (NYSE:DIN) | 21 | 0 | 7 |
| Papa John’s Int’l, Inc. (NASDAQ:PZZA) | 9 | 1 | 5 |
With the returns exhibited by Insider Monkey’s time-tested strategies, retail investors should always watch hedge fund and insider trading activity, and Texas Roadhouse Inc (NASDAQ:TXRH) applies perfectly to this mantra.
