Hedge Funds Are Nibbling On Chuy’s Holdings Inc (CHUY)

In this article you are going to find out whether hedge funds think Chuy’s Holdings Inc (NASDAQ:CHUY) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is Chuy’s Holdings Inc (NASDAQ:CHUY) worth your attention right now? Prominent investors were getting more bullish. The number of bullish hedge fund positions advanced by 2 recently. Chuy’s Holdings Inc (NASDAQ:CHUY) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 18. Our calculations also showed that CHUY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 8 hedge funds in our database with CHUY positions at the end of the first quarter.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a gander at the new hedge fund action encompassing Chuy’s Holdings Inc (NASDAQ:CHUY).

Do Hedge Funds Think CHUY Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CHUY over the last 24 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Chuy’s Holdings Inc (NASDAQ:CHUY) was held by Royce & Associates, which reported holding $12 million worth of stock at the end of June. It was followed by Renaissance Technologies with a $10.7 million position. Other investors bullish on the company included D E Shaw, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Chuy’s Holdings Inc (NASDAQ:CHUY), around 0.08% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to CHUY.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, established the most outsized position in Chuy’s Holdings Inc (NASDAQ:CHUY). Citadel Investment Group had $2.4 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management and Greg Eisner’s Engineers Gate Manager.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Chuy’s Holdings Inc (NASDAQ:CHUY) but similarly valued. We will take a look at Fossil Group Inc (NASDAQ:FOSL), Great Southern Bancorp, Inc. (NASDAQ:GSBC), Asensus Surgical, Inc. (NYSE:ASXC), Zepp Health Corporation (NYSE:ZEPP), Curis, Inc. (NASDAQ:CRIS), Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), and Central Pacific Financial Corp. (NYSE:CPF). All of these stocks’ market caps are closest to CHUY’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.3 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $36 million in CHUY’s case. Curis, Inc. (NASDAQ:CRIS) is the most popular stock in this table. On the other hand Zepp Health Corporation (NYSE:ZEPP) is the least popular one with only 2 bullish hedge fund positions. Chuy’s Holdings Inc (NASDAQ:CHUY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CHUY is 41.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately CHUY wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CHUY investors were disappointed as the stock returned -7.1% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.