Domino’s Pizza, Inc. (NYSE:DPZ) shareholders have witnessed a decrease in enthusiasm from smart money of late.
In the eyes of most shareholders, hedge funds are viewed as slow, outdated financial tools of years past. While there are over 8000 funds with their doors open at the moment, we hone in on the aristocrats of this club, about 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by watching their best investments, we have found a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as integral, bullish insider trading activity is another way to break down the financial markets. Obviously, there are plenty of reasons for an upper level exec 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 valuable potential of this strategy if shareholders know where to look (learn more here).
With all of this in mind, it’s important to take a look at the latest action surrounding Domino’s Pizza, Inc. (NYSE:DPZ).
How have hedgies been trading Domino’s Pizza, Inc. (NYSE:DPZ)?
Heading into 2013, a total of 20 of the hedge funds we track held long positions in this stock, a change of -13% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, James Crichton and Adam Weiss’s Scout Capital Management had the biggest position in Domino’s Pizza, Inc. (NYSE:DPZ), worth close to $147 million, accounting for 2.5% of its total 13F portfolio. On Scout Capital Management’s heels is Fisher Asset Management, managed by Ken Fisher, which held a $97 million position; 0.3% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Donald Chiboucis’s Columbus Circle Investors and SAC Subsidiary’s Sigma Capital Management.
Since Domino’s Pizza, Inc. (NYSE:DPZ) has faced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds that elected to cut their full holdings at the end of the year. At the top of the heap, Steven Cohen’s SAC Capital Advisors dumped the biggest stake of the 450+ funds we track, comprising about $5 million in call options, and Robert B. Gillam of McKinley Capital Management was right behind this move, as the fund dumped about $5 million worth. These transactions are interesting, as total hedge fund interest fell by 3 funds at the end of the year.
What have insiders been doing with Domino’s Pizza, Inc. (NYSE:DPZ)?
Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, Domino’s Pizza, Inc. (NYSE:DPZ) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey’s tactics, retail investors should always pay attention to hedge fund and insider trading activity, and Domino’s Pizza, Inc. (NYSE:DPZ) is an important part of this process.
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