To most stock holders, hedge funds are assumed to be underperforming, old financial tools of the past. While there are more than 8000 funds with their doors open at present, we hone in on the aristocrats of this club, close to 450 funds. It is estimated that this group controls the majority of the hedge fund industry’s total asset base, and by tracking their best investments, we have found a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per 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 beneficial, positive insider trading activity is another way to parse down the world of equities. There are many incentives for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).
With these “truths” under our belt, we’re going to take a look at the recent action regarding 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 9 of the hedge funds we track held long positions in this stock, a change of 29% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Avenue Capital, managed by Marc Lasry, holds the most valuable position in Central European Media Enterprises Ltd. (NASDAQ:CETV). Avenue Capital has a $46.5 million position in the stock, comprising 8% of its 13F portfolio. Sitting at the No. 2 spot is Vertex One Asset Management, managed by John Thiessen, which held a $12 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include J Kevin Kenny Jr’s Emerging Sovereign Group, Robert Joseph Caruso’s Select Equity Group and Rob Citrone’s Discovery Capital Management.
Consequently, specific money managers were leading the bulls’ herd. Brigade Capital, managed by Don Morgan, established the largest call position in Central European Media Enterprises Ltd. (NASDAQ:CETV). Brigade Capital had 3.4 million invested in the company at the end of the quarter. Eric Semler’s TCS Capital Management also made a $0.8 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew Hulsizer’s PEAK6 Capital Management.
What have insiders been doing with Central European Media Enterprises Ltd. (NASDAQ:CETV)?
Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past half-year. Over the last 180-day time frame, Central European Media Enterprises Ltd. (NASDAQ:CETV) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Central European Media Enterprises Ltd. (NASDAQ:CETV). These stocks are Nexstar Broadcasting Group, Inc. (NASDAQ:NXST), Outdoor Channel Holdings, Inc. (NASDAQ:OUTD), Gray Television, Inc. (NYSE:GTN), Entravision Communication (NYSE:EVC), and Fisher Communications, Inc. (NASDAQ:FSCI). This group of stocks are in the broadcasting – tv industry and their market caps are closest to CETV’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Nexstar Broadcasting Group, Inc. (NASDAQ:NXST) | 21 | 1 | 9 |
| Outdoor Channel Holdings, Inc. (NASDAQ:OUTD) | 6 | 0 | 0 |
| Gray Television, Inc. (NYSE:GTN) | 17 | 0 | 2 |
| Entravision Communication (NYSE:EVC) | 7 | 0 | 5 |
| Fisher Communications, Inc. (NASDAQ:FSCI) | 8 | 4 | 2 |
With the results exhibited by Insider Monkey’s time-tested strategies, retail investors should always watch hedge fund and insider trading sentiment, and Central European Media Enterprises Ltd. (NASDAQ:CETV) shareholders fit into this picture quite nicely.
