Is Dunkin Brands Group Inc (NASDAQ:DNKN) a splendid investment now? Hedge funds are taking a pessimistic view. The number of bullish hedge fund positions dropped by 10 recently.
If you’d ask most traders, hedge funds are perceived as slow, outdated financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, we hone in on the bigwigs of this club, close to 450 funds. It is estimated that this group controls most of the smart money’s total asset base, and by paying attention to their highest performing investments, we have unearthed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Now, let’s take a look at the recent action surrounding Dunkin Brands Group Inc (NASDAQ:DNKN).
What have hedge funds been doing with Dunkin Brands Group Inc (NASDAQ:DNKN)?
At the end of the fourth quarter, a total of 20 of the hedge funds we track held long positions in this stock, a change of -33% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes considerably.
According to our comprehensive database, Brett Barakett’s Tremblant Capital had the largest position in Dunkin Brands Group Inc (NASDAQ:DNKN), worth close to $79 million, comprising 3.6% of its total 13F portfolio. The second largest stake is held by Discovery Capital Management, managed by Rob Citrone, which held a $49 million position; 0.7% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Panayotis Takis Sparaggis’s Alkeon Capital Management, Doug Silverman’s Senator Investment Group and Ken Griffin’s Citadel Investment Group.
Because Dunkin Brands Group Inc (NASDAQ:DNKN) has witnessed declining sentiment from the smart money, it’s easy to see that there exists a select few fund managers who sold off their entire stakes last quarter. Interestingly, Stephen Mandel’s Lone Pine Capital sold off the largest investment of all the hedgies we track, totaling close to $211 million in stock., and Curtis Macnguyen of Ivory Capital (Investment Mgmt) was right behind this move, as the fund dropped about $13 million worth. These moves are important to note, as total hedge fund interest fell by 10 funds last quarter.
How have insiders been trading Dunkin Brands Group Inc (NASDAQ:DNKN)?
Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, Dunkin Brands Group Inc (NASDAQ:DNKN) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the returns exhibited by the aforementioned strategies, everyday investors should always watch hedge fund and insider trading activity, and Dunkin Brands Group Inc (NASDAQ:DNKN) shareholders fit into this picture quite nicely.
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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
