Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Dunkin Brands Group Inc (NASDAQ:DNKN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Dunkin Brands Group Inc (NASDAQ:DNKN) going to take off soon? Prominent investors are getting more optimistic. The number of long hedge fund positions increased by 1 lately. Our calculations also showed that DNKN isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are dozens of gauges stock traders put to use to assess stocks. Some of the less known gauges are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the best money managers can outpace the market by a healthy amount (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to view the new hedge fund action surrounding Dunkin Brands Group Inc (NASDAQ:DNKN).
How are hedge funds trading Dunkin Brands Group Inc (NASDAQ:DNKN)?
Heading into the third quarter of 2019, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from one quarter earlier. By comparison, 11 hedge funds held shares or bullish call options in DNKN a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Point72 Asset Management held the most valuable stake in Dunkin Brands Group Inc (NASDAQ:DNKN), which was worth $78 million at the end of the second quarter. On the second spot was Citadel Investment Group which amassed $77.1 million worth of shares. Moreover, Marshall Wace LLP, Two Sigma Advisors, and D E Shaw were also bullish on Dunkin Brands Group Inc (NASDAQ:DNKN), allocating a large percentage of their portfolios to this stock.
Now, key hedge funds have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, created the biggest position in Dunkin Brands Group Inc (NASDAQ:DNKN). Point72 Asset Management had $78 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also made a $19 million investment in the stock during the quarter. The other funds with new positions in the stock are Louis Bacon's Moore Global Investments, Michael Gelband's ExodusPoint Capital, and Matthew Hulsizer's PEAK6 Capital Management.
Let's also examine hedge fund activity in other stocks similar to Dunkin Brands Group Inc (NASDAQ:DNKN). These stocks are The Madison Square Garden Company (NYSE:MSG), The Gap Inc. (NYSE:GPS), Pilgrim's Pride Corporation (NASDAQ:PPC), and People's United Financial, Inc. (NASDAQ:PBCT). This group of stocks' market valuations match DNKN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MSG,50,1807738,-2 GPS,21,81739,-6 PPC,19,248654,5 PBCT,18,130104,-2 Average,27,567059,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $567 million. That figure was $335 million in DNKN's case. The Madison Square Garden Company (NYSE:MSG) is the most popular stock in this table. On the other hand People's United Financial, Inc. (NASDAQ:PBCT) is the least popular one with only 18 bullish hedge fund positions. Dunkin Brands Group Inc (NASDAQ:DNKN) 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately DNKN wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); DNKN investors were disappointed as the stock returned 0.1% during the third quarter 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 in 2019.
Disclosure: None. This article was originally published at Insider Monkey.