Hedge Funds Are Betting On Carrols Restaurant Group, Inc. (TAST)

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Carrols Restaurant Group, Inc. (NASDAQ:TAST).

Carrols Restaurant Group, Inc. (NASDAQ:TAST) was in 25 hedge funds’ portfolios at the end of the third quarter of 2015. Carrols Restaurant Group, Inc. (NASDAQ:TAST) shareholders have witnessed an increase in support from the world’s most elite money managers lately. There were 19 hedge funds in our database with Carrols Restaurant Group, Inc. (NASDAQ:TAST) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Intrepid Potash, Inc. (NYSE:IPI), HCI Group Inc (NYSE:HCI), and Lakeland Bancorp, Inc. (NASDAQ:LBAI) to gather more data points.

In the eyes of most stock holders, hedge funds are assumed to be underperforming, outdated financial vehicles of yesteryear. While there are over 8000 funds with their doors open today, Our experts hone in on the aristocrats of this group, around 700 funds. Most estimates calculate that this group of people watches over bulk of the hedge fund industry’s total asset base, and by tracking their matchless picks, Insider Monkey has revealed several investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, let’s take a glance at the key action regarding Carrols Restaurant Group, Inc. (NASDAQ:TAST).

What have hedge funds been doing with Carrols Restaurant Group, Inc. (NASDAQ:TAST)?

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 32% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Cove Street Capital, managed by Jeffrey Bronchick, holds the biggest position in Carrols Restaurant Group, Inc. (NASDAQ:TAST). Cove Street Capital has a $39.5 million position in the stock, comprising 5.2% of its 13F portfolio. On Cove Street Capital’s heels is Private Capital Management, led by Gregg J. Powers, holding a $21.8 million position; 2.6% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions consist of Chuck Royce’s Royce & Associates, Remy Trafelet’s Trafelet Capital, and Renaissance Technologies.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. G2 Investment Partners Management, managed by Josh Goldberg, established the most outsized position in Carrols Restaurant Group, Inc. (NASDAQ:TAST). G2 Investment Partners Management had $1.9 million invested in the company at the end of the quarter. Bryant Regan’s Lafitte Capital Management also made a $1.2 million investment in the stock during the quarter. The other funds with brand new TAST positions are D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Peter Muller’s PDT Partners.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Carrols Restaurant Group, Inc. (NASDAQ:TAST) but similarly valued. We will take a look at Intrepid Potash, Inc. (NYSE:IPI), HCI Group, Inc. (NYSE:HCI), Lakeland Bancorp, Inc. (NASDAQ:LBAI), and Eldorado Resorts Inc (NASDAQ:ERI). This group of stocks’ market valuations are closest to Carrols Restaurant Group, Inc. (NASDAQ:TAST)’s market valuation.

As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $121 million in Carrols Restaurant Group, Inc. (NASDAQ:TAST)’s case. Intrepid Potash, Inc. (NYSE:IPI) is the most popular stock in this table. On the other hand, HCI Group Inc (NYSE:HCI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks, Carrols Restaurant Group, Inc. (NASDAQ:TAST) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.