Hedge funds nibble at Chuy’s Holdings Inc (CHUY)
In this article, you’ll find out if hedge funds think Chuy’s Holdings Inc (NASDAQ:CHUY) is a good investment right now. We like to check out what smart money thinks before we do any extensive research on any given stock. While there have been several failed top hedge fund picks, consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. This is not surprising given that hedge funds have access to better information and more resources to predict stock market winners.
East Chuy’s Holdings Inc (NASDAQ:CHUY) deserves your attention right now? Leading investors were increasingly optimistic. The number of bullish hedge fund positions has increased by 2 recently. Chuy’s Holdings Inc (NASDAQ:CHUY) was in the portfolios of 10 hedge funds at the end of the second quarter of 2021. The all-time high for this statistic is 18. Our calculations have also shown that CHUY is not among the 30 most popular stocks among hedge funds (click for Q2 ranking). There were 8 hedge funds in our database with CHUY positions at the end of the first quarter.
In the financial world, there are a number of tools available to investors for valuing stocks. A pair of the lesser-known tools are the hedge fund and insider trading indicators. We have shown that historically those who follow the best picks of the best fund managers can outperform larger indices by a solid amount. Insider Monkey’s monthly stock picks have returned 185.4% since March 2017 and have outperformed S&P 500 ETFs by more than 79 percentage points (see details here). This is why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. We go through lists like the 10 best EV stocks to choose the next Tesla which will offer a 10x return. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can subscribe to our free daily newsletter at our home page. With that in mind, let’s take a look at the new hedge fund action encompassing Chuy’s Holdings Inc (NASDAQ:CHUY).
Do hedge funds think CHUY is a good stock to buy now?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the first quarter of 2020. Below, you can see the development of sentiment for hedge funds. to the CHUY during the last 24 quarters. So let’s see which hedge funds were among the top stock holders and which hedge funds were making big moves.
The largest stake in Chuy’s Holdings Inc (NASDAQ: CHUY) was held by Royce & Associates, which said it held $ 12 million in stock at the end of June. It was followed by Renaissance Technologies with a position of $ 10.7 million. Other optimistic investors for the company included DE Shaw, Millennium Management and Citadel Investment Group. In terms of the portfolio weights assigned to each position, Royce & Associates assigned the largest weight to Chuy’s Holdings Inc (NASDAQ: CHUY), around 0.08% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, distributing 0.04% of its 13F equity portfolio to CHUY.
With a general uptrend among the heavyweights, key fund managers were innovating themselves. Citadel Investment Group, managed by Ken Griffin, established the largest position in Chuy’s Holdings Inc (NASDAQ: CHUY). Citadel Investment Group had invested $ 2.4 million in the company at the end of the quarter. Cliff Asness AQR Capital management also made a $ 0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Balyasny Asset Management by Dmitry Balyasny and Greg Eisner Gate Manager Engineers.
Let’s look at hedge fund activity in other stocks – not necessarily in the same industry as Chuy’s Holdings Inc (NASDAQ: CHUY) but of similar value. We’ll take a look at Fossil Group Inc (NASDAQ:FOSL), Great Southern Bancorp, Inc. (NASDAQ:GSBC), Asensus Surgical, Inc. (NYSE:ASXC), Zepp Health Corporation (NYSE:ZEPP), Curis, Inc. (NASDAQ:Screams), Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) and Central Pacific Financial Corp. (NYSE:CPF). All the market capitalizations of these stocks are closest to the market capitalization of CHUY.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position FOSL, 16.115768.0 GSBC, 9.26822, -1 ASXC, 6.3782, -2 ZEPP, 2.582, -3 CRIS, 24 314270, -5 RIGL, 19 117438.2 CPF, 10 34533, -3 Medium, 12.3.87599, -1.7 [/table]
See the table here if you have formatting problems.
As you can see, these stocks had an average of 12.3 hedge funds with bullish positions and the average amount invested in these stocks was $ 88 million. That figure was $ 36 million in the case of CHUY. Curis, Inc. (NASDAQ:Screams) is the most popular action in this table. On the other hand, Zepp Health Corporation (NYSE:ZEPP) is the least popular with only 2 bullish hedge fund positions. Chuy’s Holdings Inc (NASDAQ: CHUY) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for CHUY is 41.8. Stocks with a higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we prefer to spend our time researching the stocks that hedge funds are accumulating on. Our calculations have shown that top 5 most popular stocks among hedge funds, returned 95.8% in 2019 and 2020 and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27 and again topped the market by 6.2 percentage points. Unfortunately, CHUY was not as popular as these 5 stocks (hedge fund sentiment was rather bearish); CHUY investors were disappointed as the stock has returned -7.1% since the end of June (through 9/27) and has underperformed the market. If you want to invest in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds, as most of these stocks have already outperformed the market in 2021.
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Disclosure: none. This article originally appeared on Monkey initiate.