Do Hedge Funds and Insiders Love AFC Enterprises, Inc. (AFCE)?

Is AFC Enterprises, Inc. (NASDAQ:AFCE) a good investment?

In today’s marketplace, there are many methods shareholders can use to watch stocks. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform their index-focused peers by a very impressive margin (see just how much).

Just as necessary, optimistic insider trading sentiment is a second way to look at the world of equities. Obviously, there are many incentives for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand where to look (learn more here).

Furthermore, let’s discuss the latest info for AFC Enterprises, Inc. (NASDAQ:AFCE).

How have hedgies been trading AFC Enterprises, Inc. (NASDAQ:AFCE)?

At Q2’s end, a total of 22 of the hedge funds we track held long positions in this stock, a change of 29% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.

According to our 13F database, Chilton Investment Company, managed by Richard Chilton, holds the largest position in AFC Enterprises, Inc. (NASDAQ:AFCE). Chilton Investment Company has a $57.5 million position in the stock, comprising 1.5% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $37.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Mark Broach’s Manatuck Hill Partners, Gregory Bylinsky and Jefferson Gramm’s Bandera Partners and John Ku’s Manor Road Capital Partners.

As industrywide interest increased, particular hedge funds have been driving this bullishness. Chilton Investment Company, managed by Richard Chilton, initiated the most outsized position in AFC Enterprises, Inc. (NASDAQ:AFCE). Chilton Investment Company had 57.5 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $37.5 million investment in the stock during the quarter. The following funds were also among the new AFCE investors: Mark Broach’s Manatuck Hill Partners, Gregory Bylinsky and Jefferson Gramm’s Bandera Partners, and John Ku’s Manor Road Capital Partners.

Insider trading activity in AFC Enterprises, Inc. (NASDAQ:AFCE)

Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the last six-month time frame, AFC Enterprises, Inc. (NASDAQ:AFCE) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to AFC Enterprises, Inc. (NASDAQ:AFCE). These stocks are Bob Evans Farms Inc (NASDAQ:BOBE), Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), Sonic Corporation (NASDAQ:SONC), Krispy Kreme Doughnuts (NYSE:KKD), and BJ’s Restaurants, Inc. (NASDAQ:BJRI). This group of stocks are in the restaurants industry and their market caps resemble AFCE’s market cap.