Hedge Funds Exhibit Bearishness on Entertainment Stocks

#3 Twenty-First Century Fox Inc (NASDAQ:FOXA)

 – Investors with long positions (as of March 31) : 46

– Aggregate value of investors’ holdings (as of March 31): $3.86 billion

Moving on, the number of hedge funds covered by us long Twenty-First Century Fox Inc (NASDAQ:FOXA) decreased by five during the first quarter, however, the aggregate value of their holdings in it rose by $311 million during the same period. Billionaire Jorge Paulo Lemann‘s 3G Capital was one of the firms that sold their entire stake in Twenty-First Century Fox Inc (NASDAQ:FOXA) during the January-March period. While shares of the company have gained 6.50% so far in 2016, they have lost 11.5% of their value in the past 12 months. Twenty-First Century Fox Inc announced recently that 300-400 of its employees have accepted its voluntary buyout package, which are a part of the cost-cutting program it unveiled in February to save $250 million in costs. On June 1, analysts at Credit Suisse reiterated their ‘Outperform’ rating on the stock while upping their price target on it to $38 from $34.

#2 Time Warner Inc (NYSE:TWX)

 – Investors with long positions (as of March 31) : 68

– Aggregate value of investors’ holdings (as of March 31): $3.94 billion

Though the ownership of Time Warner Inc (NYSE:TWX) among funds covered by us declined by four during the first quarter, the aggregate value of hedge fund’s holdings in the company shot up by $413 million during the same time. The media giant lost nearly one-fourth of its market capitalization in the second-half of 2015, but has seen a strong rally this year and currently trades up 17.69% year-to-date. After coming under pressure due to the rising trend of cost-cutting, Time Warner is finally shifting gears by putting emphasis on over-the-top (OTT) content. On June 3, its film and television content division Warner Bros. revealed that it has created a new unit that will focus on creating online content. Time Warner’s stock currently sports an annual dividend yield of 2.12%, which is higher than the dividend yield of all the stocks covered in this list. Legendary trader and billionaire Steve Cohen’s family office Point72 Asset Management increased its stake in Time Warner by 180% to nearly 1.8 million shares during the January-March period.

#1 Walt Disney Co (NYSE:DIS)

 – Investors with long positions (as of March 31) : 49

– Aggregate value of investors’ holdings (as of March 31): $3.09 billion

With its ownership among funds covered by us coming down by only two and the aggregate value of their holdings in it declining by 18.4%, Walt Disney Co (NYSE:DIS) topped the list of large-cap entertainment stocks that saw the least decline in popularity among funds during the first quarter. Shares of Walt Disney Co (NYSE:DIS) were trading flat for the year going into its second quarter earnings, but have tumbled since then and currently trade down by over 7% year-to-date. For its fiscal 2016 second quarter, the company reported EPS of $1.36 on revenue of $12.97 billion, compared to EPS of $1.23 on revenue of $12.46 billlion it had delivered a year earlier. Some 16 of the 34 analysts on Wall Street who cover the stock currently have a ‘Buy’ rating on it. Ken Fisher‘s Fisher Asset Management inched up its stake in Walt Disney by 1% to 8.64 million shares and continued to remain its largest shareholder at the end of that period.

Disclosure: None