Is Sonic Corporation (SONC) a Buy as It Plunges 10% On Cautious Forecast For FY2015?

Let’s take a look at the insider activity on Sonic Corporation (NASDAQ:SONC). There have been no insider purchase of the stock in the last few months. But there were several insider sales. Among them, the CEO of Sonic Corporation (NASDAQ:SONC), Clifford Hudson sold around 190,000 shares at around $31.50 per share, while Lead Independent Director of Sonic Corporation (NASDAQ:SONC), Frank Richardson unloaded some 106,000 shares during the first quarter. There were few other insider sales of smaller magnitude during the last couple of months.

In addition, we’re going to take a look at the latest hedge fund activity on Sonic Corporation (NASDAQ:SONC).

Hedge fund activity in Sonic Corporation (NASDAQ:SONC)

Heading into the second quarter, there was a decline of 9% in the number of hedge fund positions in Sonic Corporation from the previous quarter. Declining hedge fund interest on the stock indicate that several hedge fund managers have cut their position in the stock and few other opted to sell their entire stake in the company.

According to Insider Monkey’s database, Richard Chilton’s Chilton Investment Company holds the largest position in Sonic Corporation (NASDAQ:SONC), with 1.79 million shares worth close to $56.8 million at the end of first quarter, corresponding to 2% of its total 13F portfolio. It is followed by Israel Englander‘s Millennium Management with 491,300 shares. Other hedge fund managers that hold long positions include Ken Griffin‘s Citadel Investment Group, Robert B. Gillam’s McKinley Capital Management and Eric Bannasch’s Cadian Capital.

Among the hedgies’ who sold out their stakes in Sonic Corporation (NASDAQ:SONC,) Jim Simons‘ Renaissance Technologies leads the way by selling around 480,000 shares followed by Steve Cohen’s fund, Point72 Asset Management, who dumped 265,000 shares during the first three months of the year.

To sum up, hedge funds showed a declining interest in Sonic Corporation (NASDAQ:SONC) and a significant amount of shares was sold by some key insiders since the beginning of the year. In addition, the 10% decline of the weaker than expected guidance, show that Sonic Corporation (NASDAQ:SONC) is not a good buy at the moment.

Disclosure: None