U.S. Markets open in 3 hrs 41 mins

Hedge Funds Have Never Been This Bullish On El Pollo LoCo Holdings Inc (LOCO)

Reymerlyn Martin

Insider Monkey finished processing more than 700 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2018. In this article we are going to take a look at smart money sentiment towards El Pollo LoCo Holdings Inc (NASDAQ:LOCO).

El Pollo LoCo Holdings Inc (NASDAQ:LOCO) was in 16 hedge funds' portfolios at the end of December. LOCO investors should be aware of an increase in hedge fund interest lately. There were 14 hedge funds in our database with LOCO positions at the end of the previous quarter. Our calculations also showed that LOCO isn't among the 30 most popular stocks among hedge funds.

To the average investor there are dozens of formulas shareholders put to use to value their stock investments. A duo of the most useful formulas are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the elite money managers can trounce the S&P 500 by a healthy margin (see the details here).

Lee Ainslie MAVERICK CAPITAL

We're going to take a look at the new hedge fund action surrounding El Pollo LoCo Holdings Inc (NASDAQ:LOCO).

What have hedge funds been doing with El Pollo LoCo Holdings Inc (NASDAQ:LOCO)?

At Q4's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in LOCO a year ago. With hedge funds' capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

LOCO_may2019

Among these funds, Royce & Associates held the most valuable stake in El Pollo LoCo Holdings Inc (NASDAQ:LOCO), which was worth $11.1 million at the end of the fourth quarter. On the second spot was Winton Capital Management which amassed $4.3 million worth of shares. Moreover, Maverick Capital, Two Sigma Advisors, and Millennium Management were also bullish on El Pollo LoCo Holdings Inc (NASDAQ:LOCO), allocating a large percentage of their portfolios to this stock.

As aggregate interest increased, specific money managers were breaking ground themselves. Winton Capital Management, managed by David Harding, established the largest position in El Pollo LoCo Holdings Inc (NASDAQ:LOCO). Winton Capital Management had $4.3 million invested in the company at the end of the quarter. Lee Ainslie's Maverick Capital also made a $2.8 million investment in the stock during the quarter. The following funds were also among the new LOCO investors: D. E. Shaw's D E Shaw, David Costen Haley's HBK Investments, and Peter Algert and Kevin Coldiron's Algert Coldiron Investors.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as El Pollo LoCo Holdings Inc (NASDAQ:LOCO) but similarly valued. These stocks are Intellia Therapeutics, Inc. (NASDAQ:NTLA), Heidrick & Struggles International, Inc. (NASDAQ:HSII), Ra Pharmaceuticals, Inc. (NASDAQ:RARX), and Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT). This group of stocks' market caps match LOCO's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NTLA,10,15724,0 HSII,22,104567,3 RARX,17,159115,2 RCKT,14,176165,-2 Average,15.75,113893,0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $29 million in LOCO's case. Heidrick & Struggles International, Inc. (NASDAQ:HSII) is the most popular stock in this table. On the other hand Intellia Therapeutics, Inc. (NASDAQ:NTLA) is the least popular one with only 10 bullish hedge fund positions. El Pollo LoCo Holdings Inc (NASDAQ:LOCO) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately LOCO wasn't nearly as popular as these 15 stock and hedge funds that were betting on LOCO were disappointed as the stock returned -19.2% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

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

Related Content