Is The Wendy’s Company (NASDAQ:WEN) an outstanding investment right now? Hedge funds are becoming less hopeful. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
To most shareholders, hedge funds are viewed as unimportant, outdated financial vehicles of the past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the masters of this club, about 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total capital, and by tracking their top stock picks, we have found a few investment strategies that have historically beaten 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as beneficial, optimistic insider trading activity is another way to break down the marketplace. Just as you’d expect, there are plenty of stimuli for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” know what to do (learn more here).
Keeping this in mind, we’re going to take a glance at the recent action surrounding The Wendy’s Company (NASDAQ:WEN).
How have hedgies been trading The Wendy’s Company (NASDAQ:WEN)?
At year’s end, a total of 15 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, Nelson Peltz’s Trian Partners had the most valuable position in The Wendy’s Company (NASDAQ:WEN), worth close to $390 million, comprising 16.5% of its total 13F portfolio. Sitting at the No. 2 spot is Mason Hawkins of Southeastern Asset Management, with a $165 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other peers that hold long positions include Murray Stahl’s Horizon Asset Management, D. E. Shaw’s D E Shaw and Jonathon Jacobson’s Highfields Capital Management.
Seeing as The Wendy’s Company (NASDAQ:WEN) has experienced a declination in interest from hedge fund managers, it’s safe to say that there exists a select few hedge funds who sold off their full holdings heading into 2013. At the top of the heap, Douglas W. Case’s Advanced Investment Partners cut the largest position of the 450+ funds we monitor, totaling an estimated $1 million in stock.. Joel Greenblatt’s fund, Gotham Asset Management, also cut its stock, about $1 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading The Wendy’s Company (NASDAQ:WEN)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time frame, The Wendy’s Company (NASDAQ:WEN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey’s time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and The Wendy’s Company (NASDAQ:WEN) is no exception.
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