After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Jack in the Box Inc. (NASDAQ:JACK).
Is JACK a good stock to buy? Jack in the Box Inc. (NASDAQ:JACK) shareholders have witnessed a decrease in hedge fund interest of late. Jack in the Box Inc. (NASDAQ:JACK) was in 26 hedge funds’ portfolios at the end of September. The all time high for this statistic is 38. There were 29 hedge funds in our database with JACK holdings at the end of June. Our calculations also showed that JACK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s review the latest hedge fund action regarding Jack in the Box Inc. (NASDAQ:JACK).
David Einhorn of Greenlight Capital
Do Hedge Funds Think JACK Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in JACK over the last 25 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Scopus Asset Management was the largest shareholder of Jack in the Box Inc. (NASDAQ:JACK), with a stake worth $58.4 million reported as of the end of September. Trailing Scopus Asset Management was Arrowstreet Capital, which amassed a stake valued at $46.4 million. AQR Capital Management, Greenlight Capital, and Millennium Management 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 Stormborn Capital Management allocated the biggest weight to Jack in the Box Inc. (NASDAQ:JACK), around 1.59% of its 13F portfolio. Scopus Asset Management is also relatively very bullish on the stock, setting aside 0.99 percent of its 13F equity portfolio to JACK.
Seeing as Jack in the Box Inc. (NASDAQ:JACK) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of funds that decided to sell off their positions entirely last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest stake of all the hedgies followed by Insider Monkey, totaling close to $7.1 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund cut about $6.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Jack in the Box Inc. (NASDAQ:JACK). These stocks are IGM Biosciences, Inc. (NASDAQ:IGMS), Cronos Group Inc. (NASDAQ:CRON), ThredUp Inc. (NASDAQ:TDUP), Trinseo PLC (NYSE:TSE), XPEL Inc. (NASDAQ:XPEL), Washington Real Estate Investment Trust (NYSE:WRE), and loanDepot, Inc. (NYSE:LDI). This group of stocks’ market caps are similar to JACK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IGMS | 13 | 573560 | 0 |
| CRON | 7 | 65096 | -1 |
| TDUP | 12 | 245959 | -1 |
| TSE | 12 | 28895 | -5 |
| XPEL | 22 | 145822 | -2 |
| WRE | 4 | 41606 | -3 |
| LDI | 4 | 5775 | 0 |
| Average | 10.6 | 158102 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $158 million. That figure was $180 million in JACK’s case. XPEL Inc. (NASDAQ:XPEL) is the most popular stock in this table. On the other hand Washington Real Estate Investment Trust (NYSE:WRE) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Jack in the Box Inc. (NASDAQ:JACK) is more popular among hedge funds. Our overall hedge fund sentiment score for JACK is 72.5. 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. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately JACK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JACK were disappointed as the stock returned -13.3% since the end of the third quarter (through 12/9) 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 most of these stocks already outperformed the market since 2019.
Follow Jack In The Box Inc (NASDAQ:JACK)
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Disclosure: None. This article was originally published at Insider Monkey.
