Is Dine Brands Global, Inc. (NYSE:DIN) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Hedge fund interest in Dine Brands Global, Inc. (NYSE:DIN) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare DIN to other stocks including Seacoast Banking Corporation of Florida (NASDAQ:SBCF), CBIZ, Inc. (NYSE:CBZ), and Tennant Company (NYSE:TNC) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most shareholders, hedge funds are seen as worthless, old investment vehicles of the past. While there are more than 8000 funds trading at the moment, We look at the bigwigs of this club, around 750 funds. It is estimated that this group of investors direct bulk of all hedge funds’ total asset base, and by paying attention to their first-class picks, Insider Monkey has revealed various investment strategies that have historically outstripped Mr. Market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the latest hedge fund action surrounding Dine Brands Global, Inc. (NYSE:DIN).
What does smart money think about Dine Brands Global, Inc. (NYSE:DIN)?
Heading into the fourth quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in DIN a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Dine Brands Global, Inc. (NYSE:DIN), which was worth $64.1 million at the end of the third quarter. On the second spot was MSD Capital which amassed $56.2 million worth of shares. Arrowstreet Capital, Millennium Management, and Citadel Investment Group 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 MSD Capital allocated the biggest weight to Dine Brands Global, Inc. (NYSE:DIN), around 18.21% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, designating 0.95 percent of its 13F equity portfolio to DIN.
Judging by the fact that Dine Brands Global, Inc. (NYSE:DIN) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that elected to cut their entire stakes heading into Q4. Interestingly, Peter Muller’s PDT Partners dropped the largest position of the 750 funds watched by Insider Monkey, worth about $4 million in stock, and Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors was right behind this move, as the fund sold off about $1.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Dine Brands Global, Inc. (NYSE:DIN) but similarly valued. We will take a look at Seacoast Banking Corporation of Florida (NASDAQ:SBCF), CBIZ, Inc. (NYSE:CBZ), Tennant Company (NYSE:TNC), and TTM Technologies, Inc. (NASDAQ:TTMI). This group of stocks’ market values are closest to DIN’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $152 million in DIN’s case. CBIZ, Inc. (NYSE:CBZ) is the most popular stock in this table. On the other hand Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Dine Brands Global, Inc. (NYSE:DIN) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on DIN, though not to the same extent, as the stock returned 9.3% during the fourth quarter (through the end of November) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.