Biglari Holdings Inc (NYSE:BH) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. BH investors should pay attention to a decrease in hedge fund sentiment of late. There were 8 hedge funds in our database with BH positions at the end of the previous quarter.
According to most market participants, hedge funds are assumed to be worthless, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the leaders of this club, close to 450 funds. It is estimated that this group controls most of the hedge fund industry’s total capital, and by watching their best equity investments, we have discovered a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 24 percentage points in 7 months (see all of our picks from August).
Just as integral, optimistic insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are a number of incentives for an insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the valuable potential of this method if investors understand where to look (learn more here).
With all of this in mind, it’s important to take a look at the latest action encompassing Biglari Holdings Inc (NYSE:BH).
How have hedgies been trading Biglari Holdings Inc (NYSE:BH)?
At the end of the fourth quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Mario Gabelli’s GAMCO Investors had the largest position in Biglari Holdings Inc (NYSE:BH), worth close to $41.6 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Joel Greenblatt’s Gotham Asset Management.
Because Biglari Holdings Inc (NYSE:BH) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there were a few hedgies that slashed their positions entirely last quarter. At the top of the heap, Israel Englander’s Millennium Management dropped the biggest stake of the “upper crust” of funds we track, comprising an estimated $1 million in stock. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Biglari Holdings Inc (NYSE:BH)?
Insider buying is at its handiest when the company in question has seen transactions within the past six months. Over the latest half-year time period, Biglari Holdings Inc (NYSE:BH) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Biglari Holdings Inc (NYSE:BH). These stocks are Fiesta Restaurant Group Inc (NASDAQ:FRGI), Ruby Tuesday, Inc. (NYSE:RT), CEC Entertainment, Inc. (NYSE:CEC), Chuy’s Holdings Inc (NASDAQ:CHUY), and Denny’s Corporation (NASDAQ:DENN). This group of stocks are in the restaurants industry and their market caps are closest to BH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Fiesta Restaurant Group Inc (NASDAQ:FRGI) | 6 | 1 | 4 |
| Ruby Tuesday, Inc. (NYSE:RT) | 13 | 0 | 5 |
| CEC Entertainment, Inc. (NYSE:CEC) | 9 | 1 | 0 |
| Chuy’s Holdings Inc (NASDAQ:CHUY) | 3 | 0 | 10 |
| Denny’s Corporation (NASDAQ:DENN) | 9 | 0 | 0 |
With the returns shown by the aforementioned tactics, everyday investors should always watch hedge fund and insider trading sentiment, and Biglari Holdings Inc (NYSE:BH) applies perfectly to this mantra.
