Is Jack in the Box Inc. (NASDAQ:JACK) undervalued? Prominent investors are in an optimistic mood. The number of long hedge fund bets advanced by 3 recently.
In the eyes of most shareholders, hedge funds are perceived as underperforming, old investment tools of the past. While there are over 8000 funds trading today, we at Insider Monkey look at the crème de la crème of this club, about 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total capital, and by monitoring their best equity investments, we have found a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 the details here).
Just as integral, bullish insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are many reasons for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if piggybackers know what to do (learn more here).
Now, we’re going to take a peek at the key action encompassing Jack in the Box Inc. (NASDAQ:JACK).
How are hedge funds trading Jack in the Box Inc. (NASDAQ:JACK)?
At the end of the first quarter, a total of 21 of the hedge funds we track were bullish in this stock, a change of 17% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Blue Harbour Group, managed by Clifton S. Robbins, holds the largest position in Jack in the Box Inc. (NASDAQ:JACK). Blue Harbour Group has a $108.1 million position in the stock, comprising 11.1% of its 13F portfolio. Sitting at the No. 2 spot is Canyon Capital Advisors, managed by Joshua Friedman and Mitchell Julis, which held a $18.5 million position; 3.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Michael Doheny’s Freshford Capital Management, Glenn J. Krevlin’s Glenhill Advisors and Paul Marshall and Ian Wace’s Marshall Wace LLP.
As one would reasonably expect, key hedge funds have been driving this bullishness. Gotham Asset Management, managed by Joel Greenblatt, established the most outsized position in Jack in the Box Inc. (NASDAQ:JACK). Gotham Asset Management had 2.3 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $2.2 million position during the quarter. The other funds with brand new JACK positions are Mike Vranos’s Ellington, Matthew Tewksbury’s Stevens Capital Management, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
What have insiders been doing with Jack in the Box Inc. (NASDAQ:JACK)?
Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time frame, Jack in the Box Inc. (NASDAQ:JACK) has seen 1 unique insiders purchasing, and 9 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Jack in the Box Inc. (NASDAQ:JACK). These stocks are Bob Evans Farms Inc (NASDAQ:BOBE), DineEquity Inc (NYSE:DIN), Buffalo Wild Wings (NASDAQ:BWLD), Papa John’s Int’l, Inc. (NASDAQ:PZZA), and Texas Roadhouse Inc (NASDAQ:TXRH). This group of stocks belong to the restaurants industry and their market caps are closest to JACK’s market cap.