Is The Cheesecake Factory Incorporated (NASDAQ:CAKE) a good investment?
In the financial world, there are plenty of gauges shareholders can use to track their holdings. A pair of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can outperform the market by a solid margin (see just how much).
Equally as key, positive insider trading sentiment is another way to look at the marketplace. Just as you’d expect, there are many motivations for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this strategy if you understand where to look (learn more here).
Thus, we’re going to examine the newest info surrounding The Cheesecake Factory Incorporated (NASDAQ:CAKE).
What have hedge funds been doing with The Cheesecake Factory Incorporated (NASDAQ:CAKE)?
In preparation for the third quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 25% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully.
Out of the hedge funds we follow, GAMCO Investors, managed by Mario Gabelli, holds the largest position in The Cheesecake Factory Incorporated (NASDAQ:CAKE). GAMCO Investors has a $47.7 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $17.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Mark Kingdon’s Kingdon Capital, Jim Simons’s Renaissance Technologies and Cliff Asness’s AQR Capital Management.
Consequently, certain bigger names have jumped into The Cheesecake Factory Incorporated (NASDAQ:CAKE) headfirst. GAMCO Investors, managed by Mario Gabelli, created the largest position in The Cheesecake Factory Incorporated (NASDAQ:CAKE). GAMCO Investors had 47.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $17.5 million position during the quarter. The other funds with brand new CAKE positions are Mark Kingdon’s Kingdon Capital, Jim Simons’s Renaissance Technologies, and Cliff Asness’s AQR Capital Management.
How have insiders been trading The Cheesecake Factory Incorporated (NASDAQ:CAKE)?
Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the latest 180-day time period, The Cheesecake Factory Incorporated (NASDAQ:CAKE) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to The Cheesecake Factory Incorporated (NASDAQ:CAKE). These stocks are Brinker International, Inc. (NYSE:EAT), Buffalo Wild Wings (NASDAQ:BWLD), The Wendy’s Company (NASDAQ:WEN), Bloomin’ Brands Inc (NASDAQ:BLMN), and Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL). This group of stocks are the members of the restaurants industry and their market caps resemble CAKE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Brinker International, Inc. (NYSE:EAT) | 16 | 0 | 0 |
| Buffalo Wild Wings (NASDAQ:BWLD) | 15 | 0 | 0 |
| The Wendy’s Company (NASDAQ:WEN) | 21 | 0 | 0 |
| Bloomin’ Brands Inc (NASDAQ:BLMN) | 13 | 0 | 0 |
| Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) | 17 | 0 | 0 |
Using the returns demonstrated by the previously mentioned studies, average investors must always watch hedge fund and insider trading sentiment, and The Cheesecake Factory Incorporated (NASDAQ:CAKE) is an important part of this process.
