AFC Enterprises, Inc. (NASDAQ:AFCE) was in 14 hedge funds’ portfolio at the end of the fourth quarter of 2012. AFCE investors should pay attention to an increase in hedge fund sentiment of late. There were 12 hedge funds in our database with AFCE holdings at the end of the previous quarter.
In today’s marketplace, there are dozens of gauges investors can use to monitor publicly traded companies. A duo 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 top investment managers can outpace the S&P 500 by a significant margin (see just how much).
Equally as important, positive insider trading sentiment is a second way to break down the stock market universe. There are plenty of reasons for an insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if you understand where to look (learn more here).
Keeping this in mind, we’re going to take a look at the recent action encompassing AFC Enterprises, Inc. (NASDAQ:AFCE).
Hedge fund activity in AFC Enterprises, Inc. (NASDAQ:AFCE)
In preparation for this year, a total of 14 of the hedge funds we track held long positions in this stock, a change of 17% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Chilton Investment Company, managed by Richard Chilton, holds the biggest position in AFC Enterprises, Inc. (NASDAQ:AFCE). Chilton Investment Company has a $54.5 million position in the stock, comprising 1.5% of its 13F portfolio. Coming in second is Bandera Partners, managed by Gregory Bylinsky and Jefferson Gramm, which held a $22.5 million position; the fund has 12.7% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Mark Broach’s Manatuck Hill Partners and Robert B. Gillam’s McKinley Capital Management.
Now, key money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, initiated the biggest position in AFC Enterprises, Inc. (NASDAQ:AFCE). Driehaus Capital had 2.5 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.7 million position during the quarter. The only other fund with a brand new AFCE position is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
What have insiders been doing with AFC Enterprises, Inc. (NASDAQ:AFCE)?
Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the last half-year time period, AFC Enterprises, Inc. (NASDAQ:AFCE) has experienced 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to AFC Enterprises, Inc. (NASDAQ:AFCE). These stocks are Bob Evans Farms Inc (NASDAQ:BOBE), Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), Sonic Corporation (NASDAQ:SONC), Krispy Kreme Doughnuts (NYSE:KKD), and BJ’s Restaurants, Inc. (NASDAQ:BJRI). All of these stocks are in the restaurants industry and their market caps are closest to AFCE’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Bob Evans Farms Inc (NASDAQ:BOBE)||7||2||1|
|Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)||10||0||3|
|Sonic Corporation (NASDAQ:SONC)||10||0||6|
|Krispy Kreme Doughnuts (NYSE:KKD)||19||0||2|
|BJ’s Restaurants, Inc. (NASDAQ:BJRI)||5||0||2|
With the returns exhibited by our studies, retail investors must always keep an eye on hedge fund and insider trading activity, and AFC Enterprises, Inc. (NASDAQ:AFCE) is an important part of this process.