Hedge Funds Are Buying Ruth’s Hospitality Group, Inc. (RUTH)

Should Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) investors track the following data?

To the average investor, there are a multitude of metrics shareholders can use to track publicly traded companies. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can outclass their index-focused peers by a healthy margin (see just how much).

Just as crucial, optimistic insider trading activity is a second way to analyze the marketplace. As the old adage goes: there are lots of reasons for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the market-beating potential of this tactic if “monkeys” know where to look (learn more here).

Now that that’s out of the way, it’s important to discuss the recent info about Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH).

Hedge fund activity in Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH)

At Q2’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 18% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.

According to our 13F database, Michael Price’s MFP Investors had the most valuable position in Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH), worth close to $22.3 million, comprising 3% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $4.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

As aggregate interest spiked, certain bigger names have jumped into Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) headfirst. MFP Investors, managed by Michael Price, assembled the biggest position in Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH). MFP Investors had 22.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $4.8 million position during the quarter. The following funds were also among the new RUTH investors: Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

How are insiders trading Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in focus has seen transactions within the past six months. Over the last 180-day time period, Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH). These stocks are Ruby Tuesday, Inc. (NYSE:RT), Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL), Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG), Ignite Restaurant Group Inc (NASDAQ:IRG), and Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG). All of these stocks are in the restaurants industry and their market caps match RUTH’s market cap.

Using the results shown by our strategies, regular investors should always track hedge fund and insider trading sentiment, and Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) applies perfectly to this mantra.

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