Entravision Communication (EVC): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Entravision Communication (NYSE:EVC) has experienced an increase in activity from the world’s largest hedge funds of late.

According to most investors, hedge funds are viewed as underperforming, old financial tools of the past. While there are over 8000 funds with their doors open at present, we at Insider Monkey look at the bigwigs of this club, around 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by paying attention to their highest performing stock picks, we have uncovered a number of investment strategies that have historically outperformed the S&P 500 index. 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as important, optimistic insider trading sentiment is another way to parse down the financial markets. There are a number of reasons for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if piggybackers understand where to look (learn more here).

Now, it’s important to take a glance at the recent action surrounding Entravision Communication (NYSE:EVC).

How have hedgies been trading Entravision Communication (NYSE:EVC)?

At the end of the first quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of 40% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Entravision Communication (NYSE:EVC). Renaissance Technologies has a $2.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Geoffrey Raynor of Q Investments (Specter Holdings), with a $0.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that are bullish include Ken Griffin’s Citadel Investment Group, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Charles Davidson’s Wexford Capital.

As industrywide interest jumped, some big names were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, created the most outsized position in Entravision Communication (NYSE:EVC). Citadel Investment Group had 0.4 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.4 million position during the quarter. The following funds were also among the new EVC investors: Charles Davidson’s Wexford Capital and Steven Cohen’s SAC Capital Advisors.

How have insiders been trading Entravision Communication (NYSE:EVC)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest 180-day time frame, Entravision Communication (NYSE:EVC) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Entravision Communication (NYSE:EVC). These stocks are Nexstar Broadcasting Group, Inc. (NASDAQ:NXST), Fisher Communications, Inc. (NASDAQ:FSCI), Outdoor Channel Holdings, Inc. (NASDAQ:OUTD), Central European Media Enterprises Ltd. (NASDAQ:CETV), and Gray Television, Inc. (NYSE:GTN). This group of stocks are in the broadcasting – tv industry and their market caps are similar to EVC’s market cap.

With the results exhibited by the aforementioned tactics, everyday investors must always monitor hedge fund and insider trading activity, and Entravision Communication (NYSE:EVC) is an important part of this process.

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