Hedge Funds Are Buying Ruth’s Hospitality Group, Inc. (RUTH)

Is Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) investors should pay attention to an increase in support from the world’s most elite money managers recently. RUTH was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. There were 12 hedge funds in our database with RUTH holdings at the end of the previous quarter. At the end of this article we will also compare RUTH to other stocks including John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), Glu Mobile Inc. (NASDAQ:GLUU), and Motorcar Parts of America, Inc. (NASDAQ:MPAA) to get a better sense of its popularity.

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Now, let’s analyze the recent action surrounding Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH).

How are hedge funds trading Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH)?

Heading into Q4, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 42% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Michael Price’s MFP Investors has the largest position in Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH), worth close to $9.2 million, amounting to 1.4% of its total 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, holding a $5.6 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism comprise Robert B. Gillam’s McKinley Capital Management, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.