The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Global Eagle Entertainment Inc (NASDAQ:ENT) based on those filings.
Global Eagle Entertainment Inc (NASDAQ:ENT) has seen a decrease in hedge fund sentiment recently. Our calculations also showed that ENT 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Wil Harkey of Nantahala Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s check out the new hedge fund action regarding Global Eagle Entertainment Inc (NASDAQ:ENT).
How are hedge funds trading Global Eagle Entertainment Inc (NASDAQ:ENT)?
Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ENT over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Global Eagle Entertainment Inc (NASDAQ:ENT) was held by Nantahala Capital Management, which reported holding $4.6 million worth of stock at the end of September. It was followed by Sound Point Capital with a $0 million position. Other investors bullish on the company included Renaissance Technologies, Royce & Associates, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Nantahala Capital Management allocated the biggest weight to Global Eagle Entertainment Inc (NASDAQ:ENT), around 0.17% of its 13F portfolio. Sound Point Capital is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to ENT.
Since Global Eagle Entertainment Inc (NASDAQ:ENT) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of money managers that decided to sell off their entire stakes last quarter. Intriguingly, Charles Frumberg’s Emancipation Capital sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at about $1.4 million in stock, and Charles Frumberg’s Emancipation Capital was right behind this move, as the fund dumped about $0.8 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Global Eagle Entertainment Inc (NASDAQ:ENT). We will take a look at Mitcham Industries, Inc. (NASDAQ:MIND), Pacific Ethanol Inc (NASDAQ:PEIX), Continental Materials Corporation (NYSE:CUO), and Supercom Ltd (NASDAQ:SPCB). This group of stocks’ market values are closest to ENT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MIND | 3 | 4161 | 0 |
| PEIX | 3 | 766 | 0 |
| CUO | 2 | 906 | 0 |
| SPCB | 1 | 108 | 0 |
| Average | 2.25 | 1485 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.25 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $5 million in ENT’s case. Mitcham Industries, Inc. (NASDAQ:MIND) is the most popular stock in this table. On the other hand Supercom Ltd (NASDAQ:SPCB) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Global Eagle Entertainment Inc (NASDAQ:ENT) is more popular among hedge funds. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately ENT wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ENT were disappointed as the stock returned -46% during the second quarter (through the end of May) 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.
