Brinker International, Inc. (EAT): Are Hedge Funds Right About This Stock?

In the financial world, there are dozens of gauges investors can use to analyze their holdings. Two of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can outclass the S&P 500 by a superb amount (see just how much).

Just as useful, bullish insider trading activity is another way to analyze the marketplace. Just as you’d expect, there are lots of reasons for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this tactic if shareholders know what to do (learn more here).

What’s more, it’s important to analyze the latest info surrounding Brinker International, Inc. (NYSE:EAT).

What does the smart money think about Brinker International, Inc. (NYSE:EAT)?

In preparation for the third quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of -20% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly.

When using filings from the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Brinker International, Inc. (NYSE:EAT), worth close to $56.7 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is David Dreman of Dreman Value Management, with a $31.5 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Mark Kingdon’s Kingdon Capital and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

As Brinker International, Inc. (NYSE:EAT) has faced bearish sentiment from the smart money’s best and brightest, we can see that there was a specific group of hedgies that slashed their positions entirely at the end of the second quarter. Interestingly, Ken Griffin’s Citadel Investment Group dropped the largest stake of the 450+ funds we track, valued at about $36.3 million in stock, and Ken Fisher of Fisher Asset Management was right behind this move, as the fund said goodbye to about $15.2 million worth. These moves are important to note, as total hedge fund interest dropped by 4 funds at the end of the second quarter.

How are insiders trading Brinker International, Inc. (NYSE:EAT)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last 180-day time period, Brinker International, Inc. (NYSE:EAT) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Brinker International, Inc. (NYSE:EAT). These stocks are The Cheesecake Factory Incorporated (NASDAQ:CAKE), Bloomin’ Brands Inc (NASDAQ:BLMN), The Wendy’s Company (NASDAQ:WEN), Domino’s Pizza, Inc. (NYSE:DPZ), and Arcos Dorados Holding Inc (NYSE:ARCO). All of these stocks are in the restaurants industry and their market caps match EAT’s market cap.