IMAX Corporation (USA) (IMAX): Hedge Fund and Insider Sentiment Unchanged, What Should You Do?

In the eyes of many traders, hedge funds are perceived as delayed, old investment tools of a forgotten age. Although there are In excess of 8,000 hedge funds in operation in present day, Insider Monkey focuses on the upper echelon of this group, close to 525 funds. It is assumed that this group oversees the majority of all hedge funds’ total assets, and by monitoring their best investments, we’ve uncovered a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as key, optimistic insider trading sentiment is a second way to analyze the stock market universe. As the old adage goes: there are plenty of motivations for an insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).

Now that that’s out of the way, it’s important to examine the latest info for IMAX Corporation (USA) (NYSE:IMAX).

How have hedgies been trading IMAX Corporation (USA) (NYSE:IMAX)?

At the end of the second quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.

According to our 13F database, Brett Barakett’s Tremblant Capital had the biggest position in IMAX Corporation (USA) (NYSE:IMAX), worth close to $57.2 million, accounting for 2.7% of its total 13F portfolio. Sitting at the No. 2 spot is Clough Capital Partners, managed by Charles Clough, which held a $26.1 million position; 0.9% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Glenn Russell Dubin’s Highbridge Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Richard Chilton’s Chilton Investment Company.

Judging by the fact that IMAX Corporation (USA) (NYSE:IMAX) has experienced declining interest from the entirety of the hedge funds we track, we can see that there was a specific group of hedgies that elected to cut their entire stakes in Q1. At the top of the heap, Brett Barakett’s Tremblant Capital dumped the biggest stake of the 450+ funds we monitor, comprising about $26.9 million in stock, and Joe DiMenna of ZWEIG DIMENNA PARTNERS was right behind this move, as the fund sold off about $13 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading IMAX Corporation (USA) (NYSE:IMAX)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, IMAX Corporation (USA) (NYSE:IMAX) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to IMAX Corporation (USA) (NYSE:IMAX). These stocks are Bona Film Group Ltd (ADR) (NASDAQ:BONA), World Wrestling Entertainment, Inc. (NYSE:WWE), The Madison Square Garden Co (NASDAQ:MSG), Starz (NASDAQ:STRZA), and Live Nation Entertainment, Inc. (NYSE:LYV). All of these stocks are in the entertainment – diversified industry and their market caps resemble IMAX’s market cap.

Using the results shown by our research, average investors must always keep one eye on hedge fund and insider trading activity, and IMAX Corporation (USA) (NYSE:IMAX) is an important part of this process.

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