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Is Cracker Barrel Old Country Store, Inc. (CBRL) Going to Burn These Hedge Funds?

Nina Todic

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL).

Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) was in 21 hedge funds' portfolios at the end of September. CBRL investors should be aware of a decrease in hedge fund interest of late. There were 22 hedge funds in our database with CBRL holdings at the end of the previous quarter. Our calculations also showed that CBRL isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

[caption id="attachment_746830" align="aligncenter" width="473"] Matthew Hulsizer of PEAK6 Capital[/caption]

Matthew Hulsizer PEAK6 Capital

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to analyze the key hedge fund action regarding Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL).

Hedge fund activity in Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)

At Q3's end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CBRL over the last 17 quarters. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Among these funds, Arrowstreet Capital held the most valuable stake in Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), which was worth $83.6 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $45.8 million worth of shares. Two Sigma Advisors, AQR Capital Management, and PEAK6 Capital 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 Signition LP allocated the biggest weight to Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), around 0.93% of its 13F portfolio. Stevens Capital Management is also relatively very bullish on the stock, setting aside 0.25 percent of its 13F equity portfolio to CBRL.

Due to the fact that Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) has witnessed declining sentiment from the smart money, it's safe to say that there was a specific group of funds that elected to cut their entire stakes by the end of the third quarter. Interestingly, Dmitry Balyasny's Balyasny Asset Management dropped the biggest investment of the 750 funds followed by Insider Monkey, worth close to $8.8 million in stock. Mike Vranos's fund, Ellington, also dumped its stock, about $3.1 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds by the end of the third quarter.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) but similarly valued. We will take a look at Penske Automotive Group, Inc. (NYSE:PAG), Compania de Minas Buenaventura S.A.A. (NYSE:BVN), United Bankshares, Inc. (NASDAQ:UBSI), and Echostar Corporation (NASDAQ:SATS). All of these stocks' market caps are similar to CBRL's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PAG,16,63851,-1 BVN,6,14159,-1 UBSI,10,24052,-4 SATS,29,601864,1 Average,15.25,175982,-1.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $240 million in CBRL's case. Echostar Corporation (NASDAQ:SATS) is the most popular stock in this table. On the other hand Compania de Minas Buenaventura S.A.A. (NYSE:BVN) is the least popular one with only 6 bullish hedge fund positions. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CBRL wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CBRL were disappointed as the stock returned -4.7% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

Disclosure: None. This article was originally published at Insider Monkey.

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