Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) shareholders have witnessed an increase in hedge fund sentiment of late.
In today’s marketplace, there are plenty of methods investors can use to analyze Mr. Market. A couple of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace their index-focused peers by a solid margin (see just how much).
Just as key, bullish insider trading activity is a second way to break down the investments you’re interested in. Just as you’d expect, there are a number of incentives for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).
With these “truths” under our belt, let’s take a peek at the key action regarding Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB).
How have hedgies been trading Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)?
Heading into 2013, a total of 10 of the hedge funds we track were bullish in this stock, a change of 25% from the third quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). Citadel Investment Group has a $11 million position in the stock, comprising 0% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $4 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Royce & Associates, managed by Chuck Royce, initiated the largest position in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). Royce & Associates had 1 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0 million position during the quarter.
What have insiders been doing with Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)?
Insider buying is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time frame, Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). These stocks are Denny’s Corporation (NASDAQ:DENN), Chuy’s Holdings Inc (NASDAQ:CHUY), Sonic Corporation (NASDAQ:SONC), CEC Entertainment, Inc. (NYSE:CEC), and Fiesta Restaurant Group Inc (NASDAQ:FRGI). This group of stocks are in the restaurants industry and their market caps are similar to RRGB’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Denny’s Corporation (NASDAQ:DENN)||9||0||0|
|Chuy’s Holdings Inc (NASDAQ:CHUY)||3||0||10|
|Sonic Corporation (NASDAQ:SONC)||10||0||5|
|CEC Entertainment, Inc. (NYSE:CEC)||9||1||0|
|Fiesta Restaurant Group Inc (NASDAQ:FRGI)||6||1||4|
With the returns demonstrated by the aforementioned strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) applies perfectly to this mantra.
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.