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Hedge Funds Are Dumping Ruby Tuesday, Inc. (RT): Ignite Restaurant Group Inc (IRG), Chuy’s Holdings Inc (CHUY)

Ruby Tuesday, Inc. (NYSE:RT) was in 13 hedge funds’ portfolio at the end of December. RT has experienced a decrease in hedge fund interest recently. There were 14 hedge funds in our database with RT positions at the end of the previous quarter.

Ruby Tuesday, Inc. (NYSE:RT)

According to most shareholders, hedge funds are viewed as unimportant, outdated financial tools of years past. While there are more than 8000 funds in operation at present, we hone in on the top tier of this group, close to 450 funds. It is estimated that this group oversees most of all hedge funds’ total asset base, and by keeping an eye on their best stock picks, we have revealed a number of investment strategies that have historically outstripped 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 started 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 (check out a sample of our picks).

Equally as important, optimistic insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are many incentives for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if shareholders understand where to look (learn more here).

Keeping this in mind, it’s important to take a glance at the key action surrounding Ruby Tuesday, Inc. (NYSE:RT).

What does the smart money think about Ruby Tuesday, Inc. (NYSE:RT)?

At the end of the fourth quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of -7% from the third quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Carlson Capital, managed by Clint Carlson, holds the biggest position in Ruby Tuesday, Inc. (NYSE:RT). Carlson Capital has a $29 million position in the stock, comprising 0.5% of its 13F portfolio. On Carlson Capital’s heels is Alexander Mitchell of Scopus Asset Management, with a $2 million position; 0% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Zeke Ashton’s Centaur Capital Partners, Whitney Tilson’s T2 Partners and Joseph A. Jolson’s Harvest Capital Strategies.

Seeing as Ruby Tuesday, Inc. (NYSE:RT) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of fund managers who were dropping their entire stakes at the end of the year. At the top of the heap, Jim Simons’s Renaissance Technologies dumped the biggest investment of all the hedgies we track, valued at an estimated $1 million in stock., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund said goodbye to about $0 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 1 funds at the end of the year.

How have insiders been trading Ruby Tuesday, Inc. (NYSE:RT)?

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the last six-month time frame, Ruby Tuesday, Inc. (NYSE:RT) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Ruby Tuesday, Inc. (NYSE:RT). These stocks are Ignite Restaurant Group Inc (NASDAQ:IRG), Chuy’s Holdings Inc (NASDAQ:CHUY), Denny’s Corporation (NASDAQ:DENN), Biglari Holdings Inc (NYSE:BH), and Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG). This group of stocks belong to the restaurants industry and their market caps resemble RT’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Ignite Restaurant Group Inc (NASDAQ:IRG) 3 1 0
Chuy’s Holdings Inc (NASDAQ:CHUY) 3 0 10
Denny’s Corporation (NASDAQ:DENN) 9 0 0
Biglari Holdings Inc (NYSE:BH) 8 0 0
Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG) 3 1 0

With the results exhibited by Insider Monkey’s time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Ruby Tuesday, Inc. (NYSE:RT) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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