Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
AMC Entertainment Holdings Inc (NYSE:AMC) was in 20 hedge funds’ portfolios at the end of the third quarter of 2015. AMC Entertainment Holdings Inc (NYSE:AMC) investors should pay attention to a decrease in the hedge fund sentiment recently. There were 22 hedge funds in our database with AMC holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as MB Financial, Inc. (NASDAQ:MBFI), Kate Spade & Co (NYSE:KATE), and Kite Pharma Inc (NASDAQ:KITE) to gather more data points.
Follow Amc Entertainment Holdings Inc. (NYSE:AMC)
Follow Amc Entertainment Holdings Inc. (NYSE:AMC)
According to most stock holders, hedge funds are assumed to be underperforming, old investment tools of yesteryear. While there are greater than 8000 funds in operation today, our experts choose to focus on the crème de la crème of this club, about 700 funds. Most estimates calculate that this group of people direct bulk of the hedge fund industry’s total asset base, and by monitoring their first-class investments, Insider Monkey has identified a few investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, we’re going to go over the key action regarding AMC Entertainment Holdings Inc (NYSE:AMC).
What have hedge funds been doing with AMC Entertainment Holdings Inc (NYSE:AMC)?
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 9% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Clough Capital Partners, managed by Charles Clough, holds the biggest position in AMC Entertainment Holdings Inc (NYSE:AMC). Clough Capital Partners has a $17.7 million position in the stock, comprising 0.8% of its 13F portfolio. Coming in second is Tricadia Capital Management, led by Michael Barnes and Arif Inayatullah, holding a $14.9 million position; 2.3% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions comprise Ken Griffin’s Citadel Investment Group, Renaissance Technologies and Martin D. Sass’ MD Sass.
Judging by the fact that AMC Entertainment Holdings Inc (NYSE:AMC) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few funds who were dropping their entire stakes heading into Q4. At the top of the heap, Israel Englander’s Millennium Management dumped the largest stake of the 700 funds tracked by Insider Monkey, comprising an estimated $3.6 million in stock, and Louis Bacon of Moore Global Investments was right behind this move, as the fund said goodbye to about $3.4 million worth of shares. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as AMC Entertainment Holdings Inc (NYSE:AMC) but similarly valued. These stocks are MB Financial, Inc. (NASDAQ:MBFI), Kate Spade & Co (NYSE:KATE), Kite Pharma Inc (NASDAQ:KITE), and Puma Biotechnology Inc (NYSE:PBYI). This group of stocks’ market values matches AMC Entertainment Holdings Inc (NYSE:AMC)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MBFI | 9 | 35084 | 1 |
| KATE | 28 | 529207 | 1 |
| KITE | 22 | 384399 | 0 |
| PBYI | 18 | 759975 | -11 |
As you can see, these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $427 million. That figure was $78 million in AMC Entertainment Holdings Inc (NYSE:AMC)’s case. Kate Spade & Co (NYSE:KATE) is the most popular stock in this table. On the other hand, MB Financial, Inc. (NASDAQ:MBFI) is the least popular one with only 9 bullish hedge fund positions. AMC Entertainment Holdings Inc (NYSE:AMC) is not the most popular stock in this group, but hedge fund interest is still above average. Although this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Kate Spade & Co (NYSE:KATE) might be a better candidate to consider a long position.
