At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of December 31. In this article, we will use that wealth of knowledge to determine whether or not Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) makes for a good investment right now.
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) shareholders have witnessed an increase in support from the world's most elite money managers of late. CBRL was in 19 hedge funds' portfolios at the end of December. There were 12 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.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to review the recent hedge fund action encompassing Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL).
What does the smart money think about Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)?
At Q4's end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 58% from the second quarter of 2018. By comparison, 14 hedge funds held shares or bullish call options in CBRL a year ago. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) was held by Two Sigma Advisors, which reported holding $68.9 million worth of stock at the end of September. It was followed by AQR Capital Management with a $52.2 million position. Other investors bullish on the company included Marshall Wace LLP, PEAK6 Capital Management, and Renaissance Technologies.
Now, key hedge funds have jumped into Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) headfirst. PEAK6 Capital Management, managed by Matthew Hulsizer, created the biggest call position in Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL). PEAK6 Capital Management had $29.4 million invested in the company at the end of the quarter. Lee Ainslie's Maverick Capital also initiated a $8.8 million position during the quarter. The following funds were also among the new CBRL investors: Matthew Tewksbury's Stevens Capital Management, D. E. Shaw's D E Shaw, and Michael Platt and William Reeves's BlueCrest Capital Mgmt..
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) but similarly valued. These stocks are Integra Lifesciences Holdings Corp (NASDAQ:IART), Gates Industrial Corporation plc (NYSE:GTES), SINA Corp (NASDAQ:SINA), and Nuance Communications Inc. (NASDAQ:NUAN). This group of 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 IART,18,129212,4 GTES,8,8961,-1 SINA,21,439559,-3 NUAN,35,290246,15 Average,20.5,216995,3.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $196 million in CBRL's case. Nuance Communications Inc. (NASDAQ:NUAN) is the most popular stock in this table. On the other hand Gates Industrial Corporation plc (NYSE:GTES) is the least popular one with only 8 bullish hedge fund positions. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 CBRL wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); CBRL investors were disappointed as the stock returned -0.2% 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.