Jack in the Box Inc. (JACK): Are Hedge Funds Right About This Stock?

There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Jack in the Box Inc. (NASDAQ:JACK).

Is Jack in the Box Inc. (NASDAQ:JACK) a bargain? Investors who are in the know are taking a bearish view. The number of long hedge fund positions fell by 4 recently. At the end of this article we will also compare JACK to other stocks, including Aspen Insurance Holdings Limited (NYSE:AHL), Telecom Argentina S.A. (ADR) (NYSE:TEO), and CVR Refining LP (NYSE:CVRR) to get a better sense of its popularity.

According to most market participants, hedge funds are perceived as slow, outdated financial tools of the past. While there are greater than 8000 funds with their doors open today, Our researchers look at the crème de la crème of this club, about 700 funds. These investment experts handle the majority of the hedge fund industry’s total asset base, and by watching their first-class investments, Insider Monkey has unearthed many investment strategies that have historically defeated Mr. Market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, let’s take a look at the new action regarding Jack in the Box Inc. (NASDAQ:JACK).

What have hedge funds been doing with Jack in the Box Inc. (NASDAQ:JACK)?

Heading into Q4, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the number one position in Jack in the Box Inc. (NASDAQ:JACK). Millennium Management has an $55.6 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding an $16.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. The remaining members of the smart money that are bullish comprise John Overdeck and David Siegel’s Two Sigma Advisors, Robert B. Gillam’s McKinley Capital Management and Ira Unschuld’s Brant Point Investment Management.