You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
El Pollo LoCo Holdings Inc (NASDAQ:LOCO) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. It is surprising, as the market sentiment was quite the opposite, with the stock of El Pollo LoCo Holdings Inc (NASDAQ:LOCO) losing 47.95% value during the quarter. In order to find out more about the hedge fund sentiment, we are going to cover hedge funds that held positions in the company, at the end of the previous quarter.
At the end of this article, we will also compare El Pollo LoCo Holdings Inc (NASDAQ:LOCO) to other stocks including Metro Bancorp Inc (NASDAQ:METR), Concert Pharmaceuticals Inc (NASDAQ:CNCE), and Hawkins, Inc. (NASDAQ:HWKN) to get a better sense of its popularity.
In today’s marketplace, there are plenty of methods stock market investors use to evaluate publicly traded companies. A couple of the less known methods are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce their index-focused peers by a very impressive margin (see the details here).
With all of this in mind, we’re going to take a gander at the key action surrounding El Pollo LoCo Holdings Inc (NASDAQ:LOCO).
What have hedge funds been doing with El Pollo LoCo Holdings Inc (NASDAQ:LOCO)?
At the end of the previous quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 29% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in El Pollo LoCo Holdings Inc (NASDAQ:LOCO). Millennium Management has a $7.4 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $2 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other peers that are bullish comprise Joel Greenblatt’s Gotham Asset Management, and George McCabe’s Portolan Capital Management.
As industrywide interest jumped, key money managers have been driving this bullishness. Portolan Capital Management established the most valuable position in El Pollo LoCo Holdings Inc (NASDAQ:LOCO). Portolan Capital Management had $1.7 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated an $0.2 million position during the quarter. The only other fund with a new position in the stock is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now review hedge fund activity in other stocks similar to El Pollo LoCo Holdings Inc (NASDAQ:LOCO). These stocks are Metro Bancorp Inc (NASDAQ:METR), Concert Pharmaceuticals Inc (NASDAQ:CNCE), Hawkins, Inc. (NASDAQ:HWKN), and The Hackett Group, Inc. (NASDAQ:HCKT). This group of stocks’ market caps match El Pollo LoCo Holdings Inc (NASDAQ:LOCO)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $14 million in El Pollo LoCo Holdings Inc (NASDAQ:LOCO)’s case. The Hackett Group, Inc. (NASDAQ:HCKT) is the most popular stock in this table. On the other hand, Hawkins, Inc. (NASDAQ:HWKN) is the least popular one with only 6 bullish hedge fund positions. El Pollo LoCo Holdings Inc (NASDAQ:LOCO) 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, the Hackett Group, Inc. (NASDAQ:HCKT) might be a better candidate to consider a long position.