The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards IMAX Corporation (NYSE:IMAX).
Is IMAX a good stock to buy now? IMAX Corporation (NYSE:IMAX) has experienced a decrease in support from the world’s most elite money managers in recent months. IMAX Corporation (NYSE:IMAX) was in 18 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 21. There were 19 hedge funds in our database with IMAX positions at the end of the second quarter. Our calculations also showed that IMAX isn’t among the 30 most popular stocks among hedge funds (click for Q3 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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 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.
Ian Wace of Marshall Wace
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now we’re going to analyze the latest hedge fund action encompassing IMAX Corporation (NYSE:IMAX).
Do Hedge Funds Think IMAX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in IMAX over the last 21 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.
Among these funds, Renaissance Technologies held the most valuable stake in IMAX Corporation (NYSE:IMAX), which was worth $22.8 million at the end of the third quarter. On the second spot was Private Capital Management which amassed $14.7 million worth of shares. Arrowstreet Capital, Woodson Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Private Capital Management allocated the biggest weight to IMAX Corporation (NYSE:IMAX), around 3.37% of its 13F portfolio. Woodson Capital Management is also relatively very bullish on the stock, setting aside 0.44 percent of its 13F equity portfolio to IMAX.
Because IMAX Corporation (NYSE:IMAX) has experienced bearish sentiment from the smart money, logic holds that there exists a select few hedgies who sold off their entire stakes heading into Q4. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the largest investment of all the hedgies followed by Insider Monkey, comprising close to $2.7 million in stock. Mario Gabelli’s fund, GAMCO Investors, also dumped its stock, about $0.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as IMAX Corporation (NYSE:IMAX) but similarly valued. These stocks are Limelight Networks, Inc. (NASDAQ:LLNW), Hudson Ltd. (NYSE:HUD), Nexa Resources S.A. (NYSE:NEXA), Cryolife Inc (NYSE:CRY), Matthews International Corp (NASDAQ:MATW), NV5 Global Inc (NASDAQ:NVEE), and S & T Bancorp Inc (NASDAQ:STBA). This group of stocks’ market values match IMAX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LLNW | 17 | 74271 | -7 |
| HUD | 16 | 83748 | -5 |
| NEXA | 2 | 2468 | -2 |
| CRY | 12 | 57875 | 1 |
| MATW | 18 | 66097 | 0 |
| NVEE | 9 | 16322 | 2 |
| STBA | 5 | 3722 | -1 |
| Average | 11.3 | 43500 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.3 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $72 million in IMAX’s case. Matthews International Corp (NASDAQ:MATW) is the most popular stock in this table. On the other hand Nexa Resources S.A. (NYSE:NEXA) is the least popular one with only 2 bullish hedge fund positions. IMAX Corporation (NYSE:IMAX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IMAX is 79.7. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on IMAX as the stock returned 22.2% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
