Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards AMC Networks Inc (NASDAQ:AMCX).
AMC Networks Inc (NASDAQ:AMCX) investors should pay attention to an increase in hedge fund interest lately. 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 Cytec Industries Inc (NYSE:CYT), Liberty Broadband Corp (NASDAQ:LBRDK), and Assurant, Inc. (NYSE:AIZ) to gather more data points.
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In the eyes of most market participants, hedge funds are viewed as underperforming, old financial vehicles of the past. While there are greater than 8000 funds with their doors open today, Our experts choose to focus on the leaders of this club, approximately 700 funds. These investment experts command most of all hedge funds’ total capital, and by keeping an eye on their unrivaled investments, Insider Monkey has come up with numerous investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Keeping this in mind, we’re going to view the new action surrounding AMC Networks Inc (NASDAQ:AMCX).
How have hedgies been trading AMC Networks Inc (NASDAQ:AMCX)?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exist a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in AMC Networks Inc (NASDAQ:AMCX). Citadel Investment Group has a $140.3 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is GAMCO Investors, led by Mario Gabelli, holding a $106.9 million position; 0.7% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise Clifford Fox’s Columbus Circle Investors, David Harding’s Winton Capital Management and Israel Englander’s Millennium Management.
As aggregate interest increased, specific money managers have been driving this bullishness. Select Equity Group, managed by Robert Joseph Caruso, assembled the most valuable position in AMC Networks Inc (NASDAQ:AMCX). Select Equity Group had $22.1 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $12.6 million investment in the stock during the quarter. The other funds with brand new AMCX positions are Neil Chriss’s Hutchin Hill Capital, Brandon Osten’s Venator Capital Management, and Paul Hondros’s AlphaOne Capital Partners.
Let’s go over hedge fund activity in other stocks similar to AMC Networks Inc (NASDAQ:AMCX). We will take a look at Cytec Industries Inc (NYSE:CYT), Liberty Broadband Corp (NASDAQ:LBRDK), Assurant, Inc. (NYSE:AIZ), and Calpine Corporation (NYSE:CPN). This group of stocks’ market valuations are closest to AMCX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CYT | 34 | 849833 | 18 |
| LBRDK | 28 | 890000 | -1 |
| AIZ | 20 | 432750 | 3 |
| CPN | 38 | 983254 | -2 |
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $789 million. That figure was $471 million in AMCX’s case. Calpine Corporation (NYSE:CPN) is the most popular stock in this table. On the other hand, Assurant, Inc. (NYSE:AIZ) is the least popular one with only 20 bullish hedge fund positions. AMC Networks Inc (NASDAQ:AMCX), with 24 bullish hedge fund positions, is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal, and we’d rather spend our time focusing on stocks that hedge funds are most collectively bullish on. In this regard, CPN might be a better alternative.
