Here is What Hedge Funds Think About Domino’s Pizza, Inc. (DPZ)

Domino’s Pizza, Inc. (NYSE:DPZ) was in 23 hedge funds’ portfolio at the end of the first quarter of 2013. DPZ has seen an increase in hedge fund sentiment of late. There were 22 hedge funds in our database with DPZ positions at the end of the previous quarter.

To the average investor, there are dozens of methods shareholders can use to analyze the equity markets. Some of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outclass the broader indices by a solid amount (see just how much).

Just as important, optimistic insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are plenty of reasons for an insider to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).

Consequently, it’s important to take a glance at the recent action surrounding Domino’s Pizza, Inc. (NYSE:DPZ).

How have hedgies been trading Domino’s Pizza, Inc. (NYSE:DPZ)?

Heading into Q2, a total of 23 of the hedge funds we track were long in this stock, a change of 5% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.

Of the funds we track, James Crichton and Adam Weiss’s Scout Capital Management had the biggest position in Domino’s Pizza, Inc. (NYSE:DPZ), worth close to $150.5 million, comprising 1.9% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $127.2 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Ken Fisher’s Fisher Asset Management, Donald Chiboucis’s Columbus Circle Investors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Now, some big names were leading the bulls’ herd. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, established the most valuable position in Domino’s Pizza, Inc. (NYSE:DPZ). Algert Coldiron Investors had 1.3 million invested in the company at the end of the quarter. John Fichthorn’s Dialectic Capital Management also made a $1.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is J. Alan Reid, Jr.’s Forward Management.

What do corporate executives and insiders think about Domino’s Pizza, Inc. (NYSE:DPZ)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, Domino’s Pizza, Inc. (NYSE:DPZ) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Domino’s Pizza, Inc. (NYSE:DPZ). These stocks are Dunkin Brands Group Inc (NASDAQ:DNKN), Bloomin’ Brands Inc (NASDAQ:BLMN), The Wendy’s Company (NASDAQ:WEN), Brinker International, Inc. (NYSE:EAT), and Arcos Dorados Holding Inc (NYSE:ARCO). This group of stocks are the members of the restaurants industry and their market caps are closest to DPZ’s market cap.

With the returns exhibited by the aforementioned strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Domino’s Pizza, Inc. (NYSE:DPZ) is an important part of this process.

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