To most traders, hedge funds are seen as underperforming, old investment vehicles of the past. While there are more than 8000 funds trading today, we at Insider Monkey look at the bigwigs of this group, around 450 funds. It is estimated that this group has its hands on most of the smart money’s total asset base, and by keeping an eye on their top investments, we have determined a number of investment strategies that have historically outstripped 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 beaten the S&P 500 index by 24 percentage points in 7 months (see the details here).
Equally as important, bullish insider trading activity is another way to parse down the world of equities. As the old adage goes: there are lots of reasons for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).
Keeping this in mind, we’re going to take a peek at the key action encompassing Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB).
How are hedge funds trading Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)?
Heading into 2013, a total of 10 of the hedge funds we track were long in this stock, a change of 25% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the largest position in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), worth close to $10.6 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $3.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.
As industrywide interest jumped, specific money managers were breaking ground themselves. Royce & Associates, managed by Chuck Royce, assembled the largest position in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). Royce & Associates had 0.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.2 million position during the quarter.
What have insiders been doing with Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)?
Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past six months. Over the latest six-month time period, Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). These stocks are Denny’s Corporation (NASDAQ:DENN), Chuy’s Holdings Inc (NASDAQ:CHUY), Sonic Corporation (NASDAQ:SONC), CEC Entertainment, Inc. (NYSE:CEC), and Fiesta Restaurant Group Inc (NASDAQ:FRGI). This group of stocks are the members of the restaurants industry and their market caps are closest to RRGB’s market cap.