Like everyone else, elite investors don’t always get it right. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months, ending in October, for various reasons. Nevertheless, the data shows elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and 63% of those 30 stocks outperformed the market. The S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at The Wendy’s Company (NASDAQ:WEN) from the perspective of these elite funds.
The Wendy’s Company (NASDAQ:WEN) investors should pay attention to a big decrease in hedge fund sentiment of late, with The Wendy’s Company being held in just 26 portfolios of the investors that we track as of September 30, down from 38 on June 30. At the end of this article we will also compare The Wendy’s Company to other stocks including Avolon Holdings Ltd (NYSE:AVOL), UMB Financial Corporation (NASDAQ:UMBF), and PIMCO Dynamic Credit Income Fund (NYSE:PCI) to get a better sense of its popularity.
In the eyes of most traders, hedge funds are assumed to be unimportant, outdated financial tools of the past. While there are more than 8,000 funds with their doors open today, we look at the top tier of this club, around 700 funds. It is estimated that this group of investors preside over bulk of the smart money’s total asset base, and by watching their finest equity investments, Insider Monkey has deciphered a few investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Now, we’re going to check out the key action encompassing The Wendy’s Company (NASDAQ:WEN).
How are hedge funds trading The Wendy’s Company (NASDAQ:WEN)?
Heading into Q4, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a 32% decline from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or had already accumulated large positions).
Of the funds tracked by Insider Monkey, Nelson Peltz’s Trian Partners has the largest position in The Wendy’s Company (NASDAQ:WEN), worth close to $352.9 million, corresponding to 3% of its total 13F portfolio. The second-largest stake is held by Murray Stahl of Horizon Asset Management, with a $145.1 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish comprise D E Shaw, Ken Griffin’s Citadel Investment Group, and Renaissance Technologies.