Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Buffalo Wild Wings (NASDAQ:BWLD) from the perspective of those elite funds.
Is Buffalo Wild Wings (NASDAQ:BWLD) a buy, sell, or hold? The smart money is in an optimistic mood. The number of long hedge fund positions moved up by 4 recently. At the end of this article we will also compare BWLD to other stocks including Science Applications International Corp (NYSE:SAIC), United Bankshares, Inc. (NASDAQ:UBSI), and Sunstone Hotel Investors Inc (NYSE:SHO) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, we’re going to analyze the new action surrounding Buffalo Wild Wings (NASDAQ:BWLD).
How are hedge funds trading Buffalo Wild Wings (NASDAQ:BWLD)?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 16% from the second quarter of 2016. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Richard McGuire’s Marcato Capital Management has the number one position in Buffalo Wild Wings (NASDAQ:BWLD), worth close to $133.7 million and corresponding to 11.5% of its total 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $66.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions encompass Ken Griffin’s Citadel Investment Group, Anand Parekh’s Alyeska Investment Group and Jim Simons’s Renaissance Technologies.
As one would reasonably expect, some big names were leading the bulls’ herd. Marcato Capital Management, managed by Richard McGuire, initiated the most valuable position in Buffalo Wild Wings (NASDAQ:BWLD). According to regulatory filings, Marcato Capital had $133.7 million invested in the company at the end of the quarter. Seth Rosen’s Nitorum Capital also made a $10.1 million investment in the stock during the quarter. The other funds with brand new BWLD positions are Ken Griffin’s Citadel Investment Group, George Hall’s Clinton Group, and Clint Carlson’s Carlson Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Buffalo Wild Wings (NASDAQ:BWLD). These stocks are Science Applications International Corp (NYSE:SAIC), United Bankshares, Inc. (NASDAQ:UBSI), Sunstone Hotel Investors Inc (NYSE:SHO), and Methanex Corporation (USA) (NASDAQ:MEOH). This group of stocks’ market caps match BWLD’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was an impressive $369 million in BWLD’s case. Methanex Corporation (USA) (NASDAQ:MEOH) is the most popular stock in this table. On the other hand Sunstone Hotel Investors Inc (NYSE:SHO) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Buffalo Wild Wings (NASDAQ:BWLD) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.