Here is What Hedge Funds Think About Tim Hortons Inc. (USA) (THI)

Is Tim Hortons Inc. (USA) (NYSE:THI) a good investment?

Now, according to many investors, hedge funds are viewed as bloated, outdated investment vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds trading currently, this site focuses on the moguls of this club, about 525 funds. It is assumed that this group has its hands on the lion’s share of the smart money’s total capital, and by paying attention to their highest quality picks, we’ve formulated a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Equally as crucial, positive insider trading sentiment is a second way to analyze the world of equities. Just as you’d expect, there are lots of incentives for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if piggybackers understand what to do (learn more here).

Now that that’s out of the way, let’s discuss the recent info for Tim Hortons Inc. (USA) (NYSE:THI).

Tim Hortons Inc. (USA) (NYSE:THI)

What have hedge funds been doing with Tim Hortons Inc. (USA) (NYSE:THI)?

In preparation for the third quarter, a total of 23 of the hedge funds we track were long in this stock, a change of 109% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially.

When using filings from the hedgies we track, James Crichton and Adam Weiss’s Scout Capital Management had the most valuable position in Tim Hortons Inc. (USA) (NYSE:THI), worth close to $454.7 million, comprising 7.4% of its total 13F portfolio. Sitting at the No. 2 spot is Jonathon Jacobson of Highfields Capital Management, with a $209.7 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other peers that are bullish include Christian Leone’s Luxor Capital Group, Patrick McCormack’s Tiger Consumer Management and Frank Brosens’s Taconic Capital.

As industrywide interest increased, particular hedge funds were breaking ground themselves. Scout Capital Management, managed by James Crichton and Adam Weiss, established the most outsized position in Tim Hortons Inc. (USA) (NYSE:THI). Scout Capital Management had 454.7 million invested in the company at the end of the quarter. Jonathon Jacobson’s Highfields Capital Management also made a $209.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Christian Leone’s Luxor Capital Group, Patrick McCormack’s Tiger Consumer Management, and Frank Brosens’s Taconic Capital.

What do corporate executives and insiders think about Tim Hortons Inc. (USA) (NYSE:THI)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest half-year time frame, Tim Hortons Inc. (USA) (NYSE:THI) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Tim Hortons Inc. (USA) (NYSE:THI). These stocks are Domino’s Pizza, Inc. (NYSE:DPZ), Dunkin Brands Group Inc (NASDAQ:DNKN), Darden Restaurants, Inc. (NYSE:DRI), Burger King Worldwide Inc (NYSE:BKW), and Chipotle Mexican Grill, Inc. (NYSE:CMG). All of these stocks are in the restaurants industry and their market caps are similar to THI’s market cap.