The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about AMC Networks Inc (NASDAQ:AMCX)?
Is AMC Networks Inc (NASDAQ:AMCX) a buy, sell, or hold? The best stock pickers are getting less bullish. The number of bullish hedge fund positions decreased by 2 in recent months. Our calculations also showed that AMCX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Leon Cooperman of Omega Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s analyze the latest hedge fund action regarding AMC Networks Inc (NASDAQ:AMCX).
How have hedgies been trading AMC Networks Inc (NASDAQ:AMCX)?
Heading into the second quarter of 2020, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMCX over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, AQR Capital Management held the most valuable stake in AMC Networks Inc (NASDAQ:AMCX), which was worth $56.2 million at the end of the third quarter. On the second spot was GAMCO Investors which amassed $20.4 million worth of shares. Omega Advisors, Horizon Asset Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Omega Advisors allocated the biggest weight to AMC Networks Inc (NASDAQ:AMCX), around 1.8% of its 13F portfolio. AlphaOne Capital Partners is also relatively very bullish on the stock, dishing out 0.52 percent of its 13F equity portfolio to AMCX.
Due to the fact that AMC Networks Inc (NASDAQ:AMCX) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds who were dropping their positions entirely in the first quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the biggest position of all the hedgies tracked by Insider Monkey, valued at about $9.2 million in stock, and Ian Simm’s Impax Asset Management was right behind this move, as the fund said goodbye to about $4 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds in the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as AMC Networks Inc (NASDAQ:AMCX) but similarly valued. We will take a look at Mueller Industries, Inc. (NYSE:MLI), Corcept Therapeutics Incorporated (NASDAQ:CORT), Hilton Grand Vacations Inc. (NYSE:HGV), and Glaukos Corporation (NYSE:GKOS). This group of stocks’ market valuations resemble AMCX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MLI | 17 | 160955 | -4 |
| CORT | 21 | 160165 | 0 |
| HGV | 29 | 512572 | -17 |
| GKOS | 15 | 83596 | -1 |
| Average | 20.5 | 229322 | -5.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $229 million. That figure was $113 million in AMCX’s case. Hilton Grand Vacations Inc. (NYSE:HGV) is the most popular stock in this table. On the other hand Glaukos Corporation (NYSE:GKOS) is the least popular one with only 15 bullish hedge fund positions. AMC Networks Inc (NASDAQ:AMCX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately AMCX wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on AMCX were disappointed as the stock returned 22.9% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
