Hedge Funds Have Never Been This Bullish On Wingstop Inc (WING)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Wingstop Inc (NASDAQ:WING).

Is Wingstop Inc (NASDAQ:WING) going to take off soon? Prominent investors are becoming hopeful. The number of long hedge fund positions advanced by 3 lately. Our calculations also showed that WING isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). WING was in 27 hedge funds’ portfolios at the end of March. There were 24 hedge funds in our database with WING positions at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most market participants, hedge funds are seen as unimportant, old investment vehicles of years past. While there are over 8000 funds trading today, We hone in on the elite of this group, about 850 funds. These hedge fund managers shepherd the majority of the hedge fund industry’s total asset base, and by keeping an eye on their inimitable stock picks, Insider Monkey has found many investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .


Lee Ainslie of Maverick Capital

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to view the new hedge fund action regarding Wingstop Inc (NASDAQ:WING).

Hedge fund activity in Wingstop Inc (NASDAQ:WING)

Heading into the second quarter of 2020, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the fourth quarter of 2019. By comparison, 24 hedge funds held shares or bullish call options in WING a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of Wingstop Inc (NASDAQ:WING), with a stake worth $89 million reported as of the end of September. Trailing Renaissance Technologies was Half Sky Capital, which amassed a stake valued at $61 million. Tremblant Capital, GLG Partners, and Maverick Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Half Sky Capital allocated the biggest weight to Wingstop Inc (NASDAQ:WING), around 24.02% of its 13F portfolio. MIK Capital is also relatively very bullish on the stock, dishing out 3.54 percent of its 13F equity portfolio to WING.

As one would reasonably expect, some big names were leading the bulls’ herd. Tremblant Capital, managed by Brett Barakett, initiated the largest position in Wingstop Inc (NASDAQ:WING). Tremblant Capital had $14.1 million invested in the company at the end of the quarter. Kamyar Khajavi’s MIK Capital also made a $9.2 million investment in the stock during the quarter. The following funds were also among the new WING investors: Christopher Weldon’s Stamina Capital Management, John Osterweis’s Osterweis Capital Management, and Greg Eisner’s Engineers Gate Manager.

Let’s also examine hedge fund activity in other stocks similar to Wingstop Inc (NASDAQ:WING). We will take a look at Shell Midstream Partners LP (NYSE:SHLX), Thor Industries, Inc. (NYSE:THO), Arco Platform Limited (NASDAQ:ARCE), and Premier Inc (NASDAQ:PINC). 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
SHLX 4 12962 -4
THO 20 80400 -10
ARCE 16 144545 -1
PINC 17 190749 3
Average 14.25 107164 -3

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $264 million in WING’s case. Thor Industries, Inc. (NYSE:THO) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Wingstop Inc (NASDAQ:WING) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on WING as the stock returned 53% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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