Is Cracker Barrel Old Country Store, Inc. (CBRL) Going to Burn These Hedge Funds?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL).

Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) has experienced an increase in activity from the world’s largest hedge funds lately. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) was in 28 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 29. There were 16 hedge funds in our database with CBRL holdings at the end of March. Our calculations also showed that CBRL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

jim simons stocks portfolio investment

Jim Simons of Renaissance Technologies

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to go over the recent hedge fund action encompassing Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL).

Do Hedge Funds Think CBRL Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 75% from the first quarter of 2020. On the other hand, there were a total of 22 hedge funds with a bullish position in CBRL a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CBRL A Good Stock To Buy?

More specifically, Citadel Investment Group was the largest shareholder of Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), with a stake worth $32.3 million reported as of the end of June. Trailing Citadel Investment Group was AQR Capital Management, which amassed a stake valued at $26.8 million. Two Sigma Advisors, D E Shaw, and Renaissance Technologies 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 Blue Grotto Capital allocated the biggest weight to Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), around 3.27% of its 13F portfolio. Peconic Partners LLC is also relatively very bullish on the stock, setting aside 1.14 percent of its 13F equity portfolio to CBRL.

Now, some big names have been driving this bullishness. Blue Grotto Capital, managed by Ben Gordon, created the largest position in Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL). Blue Grotto Capital had $10.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $9.6 million position during the quarter. The following funds were also among the new CBRL investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Robert Henry Lynch’s Aristeia Capital, and Ray Dalio’s Bridgewater Associates.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) but similarly valued. These stocks are Helmerich & Payne, Inc. (NYSE:HP), Rent-A-Center Inc (NASDAQ:RCII), NewMarket Corporation (NYSE:NEU), Atlas Corp. (NYSE:ATCO), Focus Financial Partners Inc. (NASDAQ:FOCS), Mantech International Corp (NASDAQ:MANT), and WD-40 Company (NASDAQ:WDFC). This group of stocks’ market caps are closest to CBRL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HP 15 133260 -6
RCII 29 385922 3
NEU 19 119932 5
ATCO 18 1491399 6
FOCS 19 168334 -4
MANT 12 22720 -2
WDFC 17 150576 3
Average 18.4 353163 0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $353 million. That figure was $144 million in CBRL’s case. Rent-A-Center Inc (NASDAQ:RCII) is the most popular stock in this table. On the other hand Mantech International Corp (NASDAQ:MANT) is the least popular one with only 12 bullish hedge fund positions. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CBRL is 86. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and beat the market again by 4.5 percentage points. Unfortunately CBRL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CBRL were disappointed as the stock returned -8.7% since the end of June (through 10/15) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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