Krispy Kreme Doughnuts (NYSE:KKD) was in 21 hedge funds’ portfolio at the end of March. KKD has seen an increase in activity from the world’s largest hedge funds of late. There were 20 hedge funds in our database with KKD holdings at the end of the previous quarter.
According to most stock holders, hedge funds are assumed to be underperforming, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open today, we look at the moguls of this club, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total asset base, and by paying attention to their best stock picks, we have unsheathed a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as integral, bullish insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a number of reasons for an executive to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this tactic if piggybackers know what to do (learn more here).
Keeping this in mind, we’re going to take a glance at the latest action surrounding Krispy Kreme Doughnuts (NYSE:KKD).
Hedge fund activity in Krispy Kreme Doughnuts (NYSE:KKD)
At Q1’s end, a total of 21 of the hedge funds we track were bullish in this stock, a change of 5% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, Cupps Capital Management, managed by Drew Cupps, holds the biggest position in Krispy Kreme Doughnuts (NYSE:KKD). Cupps Capital Management has a $19.8 million position in the stock, comprising 2% of its 13F portfolio. On Cupps Capital Management’s heels is Royce & Associates, managed by Chuck Royce, which held a $7.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Robert B. Gillam’s McKinley Capital Management.
Now, some big names were leading the bulls’ herd. Cupps Capital Management, managed by Drew Cupps, initiated the most outsized position in Krispy Kreme Doughnuts (NYSE:KKD). Cupps Capital Management had 19.8 million invested in the company at the end of the quarter. Mark Broach’s Manatuck Hill Partners also made a $2.6 million investment in the stock during the quarter. The other funds with brand new KKD positions are Jeffrey Vinik’s Vinik Asset Management, Ken Heebner’s Capital Growth Management, and Mike Vranos’s Ellington.
How are insiders trading Krispy Kreme Doughnuts (NYSE:KKD)?
Insider buying is best served when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Krispy Kreme Doughnuts (NYSE:KKD) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Krispy Kreme Doughnuts (NYSE:KKD). These stocks are DineEquity Inc (NYSE:DIN), Sonic Corporation (NASDAQ:SONC), Bob Evans Farms Inc (NASDAQ:BOBE), AFC Enterprises, Inc. (NASDAQ:AFCE), and BJ’s Restaurants, Inc. (NASDAQ:BJRI). All of these stocks are in the restaurants industry and their market caps are closest to KKD’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|DineEquity Inc (NYSE:DIN)||21||0||7|
|Sonic Corporation (NASDAQ:SONC)||12||0||8|
|Bob Evans Farms Inc (NASDAQ:BOBE)||10||2||2|
|AFC Enterprises, Inc. (NASDAQ:AFCE)||17||1||3|
|BJ’s Restaurants, Inc. (NASDAQ:BJRI)||10||0||3|
With the results shown by the aforementioned tactics, everyday investors should always monitor hedge fund and insider trading activity, and Krispy Kreme Doughnuts (NYSE:KKD) is no exception.