Is JACK Stock A Buy or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Jack in the Box Inc. (NASDAQ:JACK) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is JACK stock a buy? Jack in the Box Inc. (NASDAQ:JACK) has seen a decrease in hedge fund interest of late. Jack in the Box Inc. (NASDAQ:JACK) was in 34 hedge funds’ portfolios at the end of December. The all time high for this statistic is 38. There were 38 hedge funds in our database with JACK positions at the end of the third quarter. Our calculations also showed that JACK isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In today’s marketplace there are a large number of gauges market participants have at their disposal to size up their holdings. A duo of the less utilized gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can outpace the broader indices by a superb margin (see the details here).

David Siegel of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Now let’s take a glance at the latest hedge fund action surrounding Jack in the Box Inc. (NASDAQ:JACK).

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

At Q4’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards JACK over the last 22 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Jack in the Box Inc. (NASDAQ:JACK). Citadel Investment Group has a $35.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $35.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish contain Jack Woodruff’s Candlestick Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Renaissance Technologies. In terms of the portfolio weights assigned to each position Franklin Street Capital allocated the biggest weight to Jack in the Box Inc. (NASDAQ:JACK), around 6.78% of its 13F portfolio. Kettle Hill Capital Management is also relatively very bullish on the stock, dishing out 1.46 percent of its 13F equity portfolio to JACK.

Due to the fact that Jack in the Box Inc. (NASDAQ:JACK) has faced falling interest from the entirety of the hedge funds we track, we can see that there is a sect of money managers who sold off their full holdings in the fourth quarter. Intriguingly, Glenn W. Welling’s Engaged Capital cut the largest investment of the 750 funds watched by Insider Monkey, comprising about $28 million in stock, and Steven Boyd’s Armistice Capital was right behind this move, as the fund said goodbye to about $13.9 million worth. These moves are interesting, as total hedge fund interest dropped by 4 funds in the fourth quarter.

Let’s check out hedge fund activity in other stocks similar to Jack in the Box Inc. (NASDAQ:JACK). These stocks are Cerevel Therapeutics Holdings, Inc. (NASDAQ:CERE), Praxis Precision Medicines, Inc. (NASDAQ:PRAX), Mednax Inc. (NYSE:MD), Tronox Holdings Plc (NYSE:TROX), Niu Technologies (NASDAQ:NIU), Compass Minerals International, Inc. (NYSE:CMP), and AeroVironment, Inc. (NASDAQ:AVAV). This group of stocks’ market values are similar to JACK’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $215 million. That figure was $328 million in JACK’s case. Tronox Holdings Plc (NYSE:TROX) is the most popular stock in this table. On the other hand Compass Minerals International, Inc. (NYSE:CMP) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Jack in the Box Inc. (NASDAQ:JACK) is more popular among hedge funds. Our overall hedge fund sentiment score for JACK is 77.8. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 7.9% in 2021 through April 1st but still managed to beat the market by 0.4 percentage points. Hedge funds were also right about betting on JACK as the stock returned 23% since the end of December (through 4/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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