Hedge Funds Are Crazy About Denny’s Corporation (DENN)

Before we spend many hours researching a company, we’d like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Denny’s Corporation (NASDAQ:DENN).

Is Denny’s Corporation (NASDAQ:DENN) a buy, sell, or hold? Investors who are in the know are becoming hopeful. The number of bullish hedge fund bets advanced by 4 recently. Our calculations also showed that DENN isn’t among the 30 most popular stocks among hedge funds. DENN was in 22 hedge funds’ portfolios at the end of the third quarter of 2018. There were 18 hedge funds in our database with DENN positions at the end of the previous quarter.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

D. E. Shaw

Let’s check out the fresh hedge fund action surrounding Denny’s Corporation (NASDAQ:DENN).

What have hedge funds been doing with Denny’s Corporation (NASDAQ:DENN)?

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in DENN heading into this year. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).


Among these funds, Renaissance Technologies held the most valuable stake in Denny’s Corporation (NASDAQ:DENN), which was worth $56.4 million at the end of the third quarter. On the second spot was Cardinal Capital which amassed $51.1 million worth of shares. Moreover, Arrowstreet Capital, Beddow Capital Management, and D E Shaw were also bullish on Denny’s Corporation (NASDAQ:DENN), allocating a large percentage of their portfolios to this stock.

With a general bullishness amongst the heavyweights, some big names have jumped into Denny’s Corporation (NASDAQ:DENN) headfirst. PEAK6 Capital Management, managed by Matthew Hulsizer, established the most valuable position in Denny’s Corporation (NASDAQ:DENN). PEAK6 Capital Management had $0.7 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ken Griffin’s Citadel Investment Group.

Let’s check out hedge fund activity in other stocks similar to Denny’s Corporation (NASDAQ:DENN). These stocks are Kelly Services, Inc. (NASDAQ:KELYA), InfraREIT, Inc. (REIT) (NYSE:HIFR), Kenon Holdings Ltd. (NYSE:KEN), and Consolidated Communications Holdings Inc (NASDAQ:CNSL). All of these stocks’ market caps match DENN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KELYA 7 7527 -4
HIFR 14 112590 -2
KEN 1 1562 0
CNSL 10 8677 -1
Average 8 32589 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $145 million in DENN’s case. InfraREIT, Inc. (REIT) (NYSE:HIFR) is the most popular stock in this table. On the other hand 0 is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Denny’s Corporation (NASDAQ:DENN) 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.

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