Is Starbucks Corporation (NASDAQ:SBUX) a buy here? Hedge funds are in a bullish mood. The number of long hedge fund bets rose by 3 recently.
In the financial world, there are plenty of gauges shareholders can use to analyze their holdings. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can beat the market by a healthy margin (see just how much).
Just as integral, optimistic insider trading sentiment is another way to parse down the world of equities. Obviously, there are lots of motivations for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, we're going to take a peek at the latest action encompassing Starbucks Corporation (NASDAQ:SBUX).
At Q1's end, a total of 53 of the hedge funds we track were bullish in this stock, a change of 6% from one quarter earlier. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Scout Capital Management, managed by James Crichton and Adam Weiss, holds the most valuable position in Starbucks Corporation (NASDAQ:SBUX). Scout Capital Management has a $185.1 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by SAC Capital Advisors, managed by Steven Cohen, which held a $181.7 million position; 0.9% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Donald Chiboucis's Columbus Circle Investors, John Lykouretzos's Hoplite Capital Management and D. E. Shaw's D E Shaw.
As one would reasonably expect, specific money managers were breaking ground themselves. Highline Capital Management, managed by Jacob Doft, initiated the largest call position in Starbucks Corporation (NASDAQ:SBUX). Highline Capital Management had 54.1 million invested in the company at the end of the quarter. David Stemerman's Conatus Capital Management also made a $49.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Mark Kingdon's Kingdon Capital, Sanford J. Colen's Apex Capital, and Jeffrey Jon Berney's TriOaks Capital Management.
Insider trading activity, especially when it's bullish, is most useful when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Starbucks Corporation (NASDAQ:SBUX) has seen 1 unique insiders purchasing, and 12 insider sales (see the details of insider trades here).
Let's check out hedge fund and insider activity in other stocks similar to Starbucks Corporation (NASDAQ:SBUX). These stocks are Panera Bread Co (NASDAQ:PNRA). All of these stocks are in the specialty eateries industry and their market caps resemble SBUX's market cap.