To the average investor, there are a multitude of indicators market participants can use to track the equity markets. A couple of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can beat the market by a superb margin (see just how much).
Equally as useful, positive insider trading activity is a second way to look at the marketplace. Obviously, there are a variety of reasons for a bullish insider to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this method if you understand what to do (learn more here).
Furthermore, let’s examine the recent info for Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB).
How have hedgies been trading Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)?
At the end of the second quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of 9% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). Royce & Associates has a $14.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is John Murphy of Alydar Capital, with a $6.9 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and D. E. Shaw’s D E Shaw.
Consequently, particular hedge funds were breaking ground themselves. Royce & Associates, managed by Chuck Royce, created the most valuable position in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB). Royce & Associates had 14.9 million invested in the company at the end of the quarter. John Murphy’s Alydar Capital also initiated a $6.9 million position during the quarter. The following funds were also among the new RRGB investors: Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management, and D. E. Shaw’s D E Shaw.
Insider trading activity in Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB)
Insider buying made by high-level executives is most useful when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators 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 belong to the restaurants industry and their market caps are similar to RRGB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Denny’s Corporation (NASDAQ:DENN) | 13 | 0 | 0 |
| Chuy’s Holdings Inc (NASDAQ:CHUY) | 5 | 0 | 0 |
| Sonic Corporation (NASDAQ:SONC) | 12 | 0 | 0 |
| CEC Entertainment, Inc. (NYSE:CEC) | 11 | 0 | 0 |
| Fiesta Restaurant Group Inc (NASDAQ:FRGI) | 14 | 0 | 0 |
Using the returns demonstrated by our tactics, regular investors should always watch hedge fund and insider trading sentiment, and Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) is an important part of this process.
