Are Hedge Funds Right About Starbucks Corporation (SBUX)?

Starbucks Corporation (NASDAQ:SBUX) is a popular stock, but this data should be in the mind of every individual investor.

In the financial world, there are dozens of methods market participants can use to track publicly traded companies. A pair of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outpace the broader indices by a solid amount (see just how much).

Just as crucial, positive insider trading activity is a second way to analyze the financial markets. Obviously, there are plenty of reasons for an upper level exec to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).

What’s more, it’s important to study the recent info about Starbucks Corporation (NASDAQ:SBUX).

Starbucks Corporation (NASDAQ:SBUX)

Hedge fund activity in Starbucks Corporation (NASDAQ:SBUX)

At the end of the second quarter, a total of 51 of the hedge funds we track were long in this stock, a change of -4% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.

When using filings from the hedgies we track, James Crichton and Adam Weiss’s Scout Capital Management had the largest position in Starbucks Corporation (NASDAQ:SBUX), worth close to $235.8 million, comprising 3.8% of its total 13F portfolio. The second largest stake is held by Donald Chiboucis of Columbus Circle Investors, with a $170.7 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Jacob Doft’s Highline Capital Management.

Because Starbucks Corporation (NASDAQ:SBUX) has witnessed declining interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedge funds who were dropping their positions entirely in Q1. At the top of the heap, Jacob Doft’s Highline Capital Management said goodbye to the biggest stake of the “upper crust” of funds we watch, valued at close to $54.1 million in stock. Robert Pohly’s fund, Samlyn Capital, also sold off its stock, about $50.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 2 funds in Q1.

What do corporate executives and insiders think about Starbucks Corporation (NASDAQ:SBUX)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in question has seen transactions within the past half-year. Over the latest 180-day time period, Starbucks Corporation (NASDAQ:SBUX) has seen 1 unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Starbucks Corporation (NASDAQ:SBUX). These stocks are Flanigan’s Enterprises, Inc. (NYSEAMEX:BDL) and Panera Bread Co (NASDAQ:PNRA). This group of stocks are in the specialty eateries industry and their market caps are similar to SBUX’s market cap.