Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG) has seen an increase in hedge fund interest in recent months.
In the eyes of most traders, hedge funds are viewed as unimportant, outdated financial vehicles of yesteryear. While there are over 8000 funds with their doors open today, we choose to focus on the moguls of this group, about 450 funds. It is estimated that this group controls most of the hedge fund industry’s total asset base, and by paying attention to their best stock picks, we have figured out a few 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 began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, positive insider trading activity is another way to parse down the marketplace. Obviously, there are a number of reasons for an executive to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).
With all of this in mind, it’s important to take a look at the recent action regarding Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG).
What have hedge funds been doing with Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG)?
At the end of the fourth quarter, a total of 7 of the hedge funds we track were long in this stock, a change of 17% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly.
Of the funds we track, Cumberland Associates, managed by Andrew Wallach, holds the biggest position in Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG). Cumberland Associates has a $2 million position in the stock, comprising 2.9% of its 13F portfolio. On Cumberland Associates’s heels is Millennium Management, managed by Israel Englander, which held a $1.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
As aggregate interest increased, some big names have jumped into Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG) headfirst. AQR Capital Management, managed by Cliff Asness, initiated the biggest position in Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG). AQR Capital Management had 0.5 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.3 million investment in the stock during the quarter.
What have insiders been doing with Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG)?
Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time frame, Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG) has seen 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG). These stocks are Jamba, Inc. (NASDAQ:JMBA), Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG), Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL), Ignite Restaurant Group Inc (NASDAQ:IRG), and Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH). This group of stocks are in the restaurants industry and their market caps match BBRG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Jamba, Inc. (NASDAQ:JMBA) | 7 | 2 | 1 |
| Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG) | 3 | 1 | 0 |
| Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL) | 8 | 0 | 4 |
| Ignite Restaurant Group Inc (NASDAQ:IRG) | 3 | 1 | 0 |
| Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) | 10 | 0 | 0 |
With the returns exhibited by our strategies, retail investors should always watch hedge fund and insider trading sentiment, and Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG) applies perfectly to this mantra.
