Hedge Funds Are Crazy About Starz (STRZA)

Starz (NASDAQ:STRZA) has experienced an increase in enthusiasm from smart money recently. One more point in favor of Starz came today morning from Lazard, which gave the company a higher rank.

According to most traders, hedge funds are assumed to be slow, outdated investment tools of the past. While there are greater than 8000 funds in operation today, we at Insider Monkey choose to focus on the moguls of this group, around 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total asset base, and by monitoring their top stock picks, we have come up with a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as important, bullish insider trading sentiment is a second way to parse down the marketplace. Obviously, there are lots of reasons for an executive to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the latest action surrounding Starz (NASDAQ:STRZA).

How have hedgies been trading Starz (NASDAQ:STRZA)?

#DIV/0!

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Consequently, key money managers were leading the bulls’ herd. Hutchin Hill Capital, managed by Neil Chriss, established the most outsized position in Starz (NASDAQ:STRZA). Hutchin Hill Capital had 33.6 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $0.3 million position during the quarter.

How have insiders been trading Starz (NASDAQ:STRZA)?

Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last six-month time period, Starz (NASDAQ:STRZA) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Starz (NASDAQ:STRZA). These stocks are Bona Film Group Ltd (ADR) (NASDAQ:BONA), World Wrestling Entertainment, Inc. (NYSE:WWE), The Madison Square Garden Co (NASDAQ:MSG), IMAX Corporation (USA) (NYSE:IMAX), and Live Nation Entertainment, Inc. (NYSE:LYV). This group of stocks are in the entertainment – diversified industry and their market caps match STRZA’s market cap.

With the results demonstrated by the aforementioned tactics, everyday investors should always watch hedge fund and insider trading sentiment, and Starz (NASDAQ:STRZA) is no exception.

Click here to learn why you should track hedge funds