After the markets closed on Monday Sonic Corporation (NASDAQ:SONC) reported its fiscal third-quarter financial results. The fast food company’s results for the fiscal third quarter were in-line with the expectations. The company reported Earnings Per Share (EPS) of $0.36 with a revenue of $164.7 million, in-line with Thomson Reuters consensus estimates of $0.36 in EPS and $164.17 million in revenues. In this way, Sonic Corporation (NASDAQ:SONC) posted a 20% increase in EPS and a $12 million gain in revenue. The major talking point was a conservative guidance given by the company for the fiscal year 2015. Sonic Corporation (NASDAQ:SONC) expects the EPS to grow in the range between 27% – 29% from its FY2014 EPS of $0.84, but it is below the consensus estimate of $1.09. This forecast from the company has impacted the stock, as it declined by 10% on Tuesday. How do hedge funds feel about Sonic Corporation and is it the right time to buy this stock?
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It is very important to track the hedge fund and insider activity on the stock as it can give a different perspective. Hedge funds generally do a detailed research on their stock picks and tracking these hedge funds could help us in gaining an advantage. On the other hand, insider activity on the stock is as important as the hedge fund activity, as the insiders have the luxury of more information about the stock when compared to hedge fund managers and analysts.
The number of hedge funds’ positions in Sonic Corporation (NASDAQ:SONC) dropped to 21 at the end of the first quarter from 23 in the previous quarter. This shows that hedge funds are not too positive on this stock. Even though the number of hedge fund position in the stock has reduced, the aggregate capital invested in the stock by hedge funds went up by 14% to $130.9 million by the end of first quarter. This increase in aggregate capital investment cannot be considered as a bullish sentiment from hedgies’, as the stock has gained around 20% during the first quarter.