Hedge Funds Are Cashing Out Of Wingstop Inc (WING)

We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Wingstop Inc (NASDAQ:WING) based on that data.

Wingstop Inc (NASDAQ:WING) was in 23 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 32. WING has seen a decrease in hedge fund sentiment recently. There were 28 hedge funds in our database with WING positions at the end of the fourth quarter. Our calculations also showed that WING isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the fresh hedge fund action encompassing Wingstop Inc (NASDAQ:WING).

Do Hedge Funds Think WING Is A Good Stock To Buy Now?

At Q1’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in WING over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Terry Smith’s Fundsmith LLP has the largest position in Wingstop Inc (NASDAQ:WING), worth close to $56.9 million, comprising 0.2% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $37.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism comprise John Overdeck and David Siegel’s Two Sigma Advisors, Brett Barakett’s Tremblant Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Tremblant Capital allocated the biggest weight to Wingstop Inc (NASDAQ:WING), around 1.04% of its 13F portfolio. Osterweis Capital Management is also relatively very bullish on the stock, setting aside 0.37 percent of its 13F equity portfolio to WING.

Due to the fact that Wingstop Inc (NASDAQ:WING) has experienced declining sentiment from hedge fund managers, we can see that there was a specific group of fund managers that slashed their full holdings in the first quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the biggest stake of the “upper crust” of funds followed by Insider Monkey, totaling close to $6.5 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund said goodbye to about $3.8 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds in the first quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Wingstop Inc (NASDAQ:WING). These stocks are Tenable Holdings, Inc. (NASDAQ:TENB), Advantage Solutions Inc. (NASDAQ:ADV), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), GoHealth, Inc. (NASDAQ:GOCO), Kinsale Capital Group, Inc. (NASDAQ:KNSL), Olo Inc. (NYSE:OLO), and Safehold Inc. (NYSE:SAFE). All of these stocks’ market caps resemble WING’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TENB 32 532519 -7
ADV 24 605969 5
AJRD 30 786292 -6
GOCO 17 549530 -1
KNSL 17 49810 0
OLO 21 85960 21
SAFE 8 7714 -1
Average 21.3 373971 1.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $374 million. That figure was $234 million in WING’s case. Tenable Holdings, Inc. (NASDAQ:TENB) is the most popular stock in this table. On the other hand Safehold Inc. (NYSE:SAFE) is the least popular one with only 8 bullish hedge fund positions. Wingstop Inc (NASDAQ:WING) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WING is 52.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on WING as the stock returned 21.9% since the end of Q1 (through 7/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.