With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB).
Is Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) worth your attention right now? Investors who are in the know are getting less bullish. The number of bullish hedge fund bets decreased by 3 lately. Our calculations also showed that RRGB isn't among the 30 most popular stocks among hedge funds (see the video below). RRGB was in 12 hedge funds' portfolios at the end of June. There were 15 hedge funds in our database with RRGB holdings at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most market participants, hedge funds are viewed as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds with their doors open at present, Our experts choose to focus on the top tier of this group, approximately 750 funds. It is estimated that this group of investors preside over the lion's share of all hedge funds' total capital, and by tracking their highest performing picks, Insider Monkey has figured out various investment strategies that have historically surpassed the market. Insider Monkey's flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points a year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, 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. Let's review the latest hedge fund action regarding Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB).
Hedge fund activity in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)
At the end of the second quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in RRGB a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), with a stake worth $11 million reported as of the end of March. Trailing Citadel Investment Group was Balyasny Asset Management, which amassed a stake valued at $3.8 million. Arrowstreet Capital, GMT Capital, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Because Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) has experienced a decline in interest from the smart money, it's easy to see that there lies a certain "tier" of hedgies that elected to cut their positions entirely last quarter. It's worth mentioning that Israel Englander's Millennium Management said goodbye to the biggest position of the 750 funds followed by Insider Monkey, valued at close to $12.6 million in stock. Cliff Asness's fund, AQR Capital Management, also said goodbye to its stock, about $0.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 3 funds last quarter.
Let's go over hedge fund activity in other stocks similar to Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). We will take a look at Vapotherm, Inc. (NYSE:VAPO), Spartan Motors Inc (NASDAQ:SPAR), Evolus, Inc. (NASDAQ:EOLS), and Village Super Market, Inc. (NASDAQ:VLGEA). This group of stocks' market caps are closest to RRGB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VAPO,6,87293,1 SPAR,11,44244,-4 EOLS,12,15398,6 VLGEA,8,45463,0 Average,9.25,48100,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $32 million in RRGB's case. Evolus, Inc. (NASDAQ:EOLS) is the most popular stock in this table. On the other hand Vapotherm, Inc. (NYSE:VAPO) is the least popular one with only 6 bullish hedge fund positions. Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on RRGB as the stock returned 8.8% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.