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. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Central European Media Enterprises Ltd. (NASDAQ:CETV) and determine whether the smart money was really smart about this stock.
Central European Media Enterprises Ltd. (NASDAQ:CETV) investors should be aware of an increase in activity from the world’s largest hedge funds of late. CETV was in 11 hedge funds’ portfolios at the end of the first quarter of 2020. There were 10 hedge funds in our database with CETV positions at the end of the previous quarter. Our calculations also showed that CETV 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.
Israel Englander of Millennium Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s analyze the latest hedge fund action encompassing Central European Media Enterprises Ltd. (NASDAQ:CETV).
How are hedge funds trading Central European Media Enterprises Ltd. (NASDAQ:CETV)?
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in CETV over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Central European Media Enterprises Ltd. (NASDAQ:CETV), with a stake worth $12.9 million reported as of the end of September. Trailing Millennium Management was Alpine Associates, which amassed a stake valued at $10.6 million. GAMCO Investors, Renaissance Technologies, and LMR Partners 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 Alpine Associates allocated the biggest weight to Central European Media Enterprises Ltd. (NASDAQ:CETV), around 0.42% of its 13F portfolio. LMR Partners is also relatively very bullish on the stock, designating 0.24 percent of its 13F equity portfolio to CETV.
As industrywide interest jumped, key money managers were leading the bulls’ herd. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, created the biggest position in Central European Media Enterprises Ltd. (NASDAQ:CETV). LMR Partners had $2.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.1 million position during the quarter.
Let’s go over hedge fund activity in other stocks similar to Central European Media Enterprises Ltd. (NASDAQ:CETV). These stocks are Astec Industries, Inc. (NASDAQ:ASTE), Meta Financial Group Inc. (NASDAQ:CASH), Sandy Spring Bancorp Inc. (NASDAQ:SASR), and Anterix Inc. (NASDAQ:ATEX). This group of stocks’ market values are closest to CETV’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASTE | 10 | 95666 | 1 |
| CASH | 13 | 71021 | 1 |
| SASR | 12 | 36542 | -3 |
| ATEX | 11 | 415373 | -1 |
| Average | 11.5 | 154651 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $37 million in CETV’s case. Meta Financial Group Inc. (NASDAQ:CASH) is the most popular stock in this table. On the other hand Astec Industries, Inc. (NASDAQ:ASTE) is the least popular one with only 10 bullish hedge fund positions. Central European Media Enterprises Ltd. (NASDAQ:CETV) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 12.3% in 2020 through June 30th and surpassed the market by 15.5 percentage points. Unfortunately CETV wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); CETV investors were disappointed as the stock returned 13.1% during the second quarter 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 most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
