Is Dunkin Brands Group Inc (NASDAQ:DNKN) Going to Burn These Hedge Funds?

Dunkin Brands Group Inc (NASDAQ:DNKN) was in 20 hedge funds’ portfolio at the end of the fourth quarter of 2012. DNKN investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 30 hedge funds in our database with DNKN positions at the end of the previous quarter.

Dunkin Brands Group Inc (DNKN)In the financial world, there are a multitude of gauges market participants can use to track Mr. Market. A duo of the most innovative 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 top fund managers can trounce their index-focused peers by a very impressive amount (see just how much).

Just as key, positive insider trading sentiment is another way to break down the investments you’re interested in. Just as you’d expect, there are a variety of stimuli for an upper level exec to drop shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).

With all of this in mind, let’s take a gander at the recent action regarding Dunkin Brands Group Inc (NASDAQ:DNKN).

What have hedge funds been doing with Dunkin Brands Group Inc (NASDAQ:DNKN)?

Heading into 2013, a total of 20 of the hedge funds we track were bullish in this stock, a change of -33% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, Brett Barakett’s Tremblant Capital had the largest position in Dunkin Brands Group Inc (NASDAQ:DNKN), worth close to $79 million, comprising 3.6% of its total 13F portfolio. Sitting at the No. 2 spot is Rob Citrone of Discovery Capital Management, with a $49 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other peers with similar optimism include Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management, Doug Silverman’s Senator Investment Group and Ken Griffin’s Citadel Investment Group.

Due to the fact that Dunkin Brands Group Inc (NASDAQ:DNKN) has experienced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that slashed their positions entirely at the end of the year. It’s worth mentioning that Stephen Mandel’s Lone Pine Capital cut the largest position of the 450+ funds we track, totaling close to $211 million in stock.. Curtis Macnguyen’s fund, Ivory Capital (Investment Mgmt), also dropped its stock, about $13 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 10 funds at the end of the year.

Insider trading activity in Dunkin Brands Group Inc (NASDAQ:DNKN)

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past six months. Over the last six-month time period, Dunkin Brands Group Inc (NASDAQ:DNKN) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

With the returns shown by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Dunkin Brands Group Inc (NASDAQ:DNKN) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.