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Hedge Funds Aren’t Crazy About Popeyes Louisiana Kitchen Inc (PLKI) Anymore

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI).

Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI) has experienced a decrease in enthusiasm from smart money lately. At the end of this article we will also compare PLKI to other stocks, including 3D Systems Corporation (NYSE:DDD), WD-40 Company (NASDAQ:WDFC), and RingCentral Inc (NYSE:RNG) to get a better sense of its popularity.

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In the financial world there are several gauges shareholders have at their disposal to appraise stocks. Some of the most useful gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the market by a very impressive amount (see the details here).

Keeping this in mind, we’re going to view the latest action regarding Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI).

Hedge fund activity in Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI)

Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies has the biggest position in Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI), worth close to $49.7 million, amounting to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Mark Broach’s Manatuck Hill Partners, with an $31.2 million position; the fund has 13.3% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include John Ku’s Manor Road Capital Partners and Charles Paquelet’s Skylands Capital.

Since Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI) has faced bearish sentiment from hedge fund managers, logic holds that there exists a select few fund managers that slashed their positions entirely last quarter. Intriguingly, Gregory Bylinsky and Jefferson Gramm’s Bandera Partners cut the largest position of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $6.4 million in stock, and Richard Chilton’s Chilton Investment Company was right behind this move, as the fund said goodbye to about $3 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI). These stocks are 3D Systems Corporation (NYSE:DDD), WD-40 Company (NASDAQ:WDFC), RingCentral Inc (NYSE:RNG), and Amedisys Inc (NASDAQ:AMED). This group of stocks’ market values are closest to PLKI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DDD 12 93246 -5
WDFC 7 61943 1
RNG 29 193797 7
AMED 24 223659 5

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $143 million, close to the $149 million figure in PLKI’s case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand WD-40 Company (NASDAQ:WDFC) is the least popular one with only 7 bullish hedge fund positions. Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RNG might be a better candidate to consider a long position.

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