Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the first 6 weeks of the fourth quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Cinemark Holdings, Inc. (NYSE:CNK) to find out whether it was one of their high conviction long-term ideas.
Cinemark Holdings, Inc. (NYSE:CNK) investors should pay attention to an increase in hedge fund interest of late. Our calculations also showed that cnk isn’t among the 30 most popular stocks among hedge funds.
In the 21st century investor’s toolkit there are a multitude of gauges stock market investors use to value their holdings. Some of the most underrated gauges are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a superb amount (see the details here).
Let’s go over the key hedge fund action regarding Cinemark Holdings, Inc. (NYSE:CNK).
How have hedgies been trading Cinemark Holdings, Inc. (NYSE:CNK)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the second quarter of 2018. On the other hand, there were a total of 11 hedge funds with a bullish position in CNK at the beginning of this year. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, Rivulet Capital held the most valuable stake in Cinemark Holdings, Inc. (NYSE:CNK), which was worth $126 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $38.8 million worth of shares. Moreover, Millennium Management, Renaissance Technologies, and Gotham Asset Management were also bullish on Cinemark Holdings, Inc. (NYSE:CNK), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, specific money managers have jumped into Cinemark Holdings, Inc. (NYSE:CNK) headfirst. Renaissance Technologies, managed by Jim Simons, assembled the most outsized position in Cinemark Holdings, Inc. (NYSE:CNK). Renaissance Technologies had $14.1 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $12.6 million position during the quarter. The other funds with new positions in the stock are Noam Gottesman’s GLG Partners, Matthew Tewksbury’s Stevens Capital Management, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Cinemark Holdings, Inc. (NYSE:CNK) but similarly valued. We will take a look at Arris International plc (NASDAQ:ARRS), Pinnacle Financial Partners, Inc. (NASDAQ:PNFP), Green Dot Corporation (NYSE:GDOT), and NewMarket Corporation (NYSE:NEU). This group of stocks’ market caps resemble CNK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARRS | 23 | 645342 | -2 |
| PNFP | 13 | 130971 | 3 |
| GDOT | 20 | 320437 | -1 |
| NEU | 13 | 35484 | 2 |
| Average | 17.25 | 283059 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $283 million. That figure was $249 million in CNK’s case. Arris International plc (NASDAQ:ARRS) is the most popular stock in this table. On the other hand Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) is the least popular one with only 13 bullish hedge fund positions. Cinemark Holdings, Inc. (NYSE:CNK) 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. In this regard ARRS might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
