Chipotle Mexican Grill, Inc. (NYSE:CMG) has seen a decrease in hedge fund sentiment in recent months.
To most shareholders, hedge funds are viewed as underperforming, old investment tools of the past. While there are more than 8000 funds trading today, we at Insider Monkey hone in on the leaders of this group, around 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total asset base, and by watching their highest performing investments, we have revealed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as important, positive insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are plenty of incentives for a corporate insider to drop shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action regarding Chipotle Mexican Grill, Inc. (NYSE:CMG).
How have hedgies been trading Chipotle Mexican Grill, Inc. (NYSE:CMG)?
At the end of the fourth quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of -25% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Eton Park Capital, managed by Eric Mindich, holds the biggest position in Chipotle Mexican Grill, Inc. (NYSE:CMG). Eton Park Capital has a $104 million position in the stock, comprising 2.2% of its 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which held a $88 million call position; 2.2% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Ken Griffin’s Citadel Investment Group, and Jim Simons’s Renaissance Technologies.
Because Chipotle Mexican Grill, Inc. (NYSE:CMG) has experienced declining sentiment from the smart money, we can see that there were a few money managers who sold off their full holdings in Q4. At the top of the heap, Philippe Laffont’s Coatue Management sold off the biggest stake of the “upper crust” of funds we track, totaling an estimated $132 million in stock.. Patrick McCormack’s fund, Tiger Consumer Management, also dropped its stock, about $89 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds in Q4.
How are insiders trading Chipotle Mexican Grill, Inc. (NYSE:CMG)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time period, Chipotle Mexican Grill, Inc. (NYSE:CMG) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned research, everyday investors must always monitor hedge fund and insider trading sentiment, and Chipotle Mexican Grill, Inc. (NYSE:CMG) is no exception.
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