Here is What Hedge Funds Think About Six Flags Entertainment Corp (SIX)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Six Flags Entertainment Corp (NYSE:SIX) in this article.

Six Flags Entertainment Corp (NYSE:SIX) investors should be aware of a decrease in hedge fund sentiment lately. Six Flags Entertainment Corp (NYSE:SIX) was in 37 hedge funds’ portfolios at the end of March. The all time high for this statistic is 41. Our calculations also showed that SIX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Charles Clough of Clough Capital Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the key hedge fund action regarding Six Flags Entertainment Corp (NYSE:SIX).

Do Hedge Funds Think SIX Is A Good Stock To Buy Now?

At Q1’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SIX over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Rehan Jaffer’s H Partners Management has the biggest position in Six Flags Entertainment Corp (NYSE:SIX), worth close to $362.5 million, corresponding to 32.9% of its total 13F portfolio. Sitting at the No. 2 spot is Jericho Capital Asset Management, led by Josh Resnick, holding a $88.9 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions contain Edmond M. Safra’s EMS Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Gaurav Kapadia’s XN Exponent Advisors. In terms of the portfolio weights assigned to each position Altai Capital allocated the biggest weight to Six Flags Entertainment Corp (NYSE:SIX), around 50.85% of its 13F portfolio. H Partners Management is also relatively very bullish on the stock, setting aside 32.91 percent of its 13F equity portfolio to SIX.

Since Six Flags Entertainment Corp (NYSE:SIX) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of money managers who sold off their positions entirely last quarter. Interestingly, Len Kipp and Xavier Majic’s Maple Rock Capital sold off the largest investment of the 750 funds tracked by Insider Monkey, worth close to $22.8 million in stock. Robert Bishop’s fund, Impala Asset Management, also dumped its stock, about $17.5 million worth. These moves are interesting, as total hedge fund interest was cut by 4 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Six Flags Entertainment Corp (NYSE:SIX). We will take a look at Mercury Systems Inc (NASDAQ:MRCY), MACOM Technology Solutions Holdings Inc (NASDAQ:MTSI), W.R. Grace & Co. (NYSE:GRA), BigCommerce Holdings, Inc. (NASDAQ:BIGC), H&R Block, Inc. (NYSE:HRB), Atotech Limited (NYSE:ATC), and Goosehead Insurance, Inc. (NASDAQ:GSHD). This group of stocks’ market values match SIX’s market value.

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As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $387 million. That figure was $1036 million in SIX’s case. W.R. Grace & Co. (NYSE:GRA) is the most popular stock in this table. On the other hand Mercury Systems Inc (NASDAQ:MRCY) is the least popular one with only 17 bullish hedge fund positions. Six Flags Entertainment Corp (NYSE:SIX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SIX is 66.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately SIX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SIX were disappointed as the stock returned -3.5% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.