Is Regal Entertainment Group (RGC) Going to Burn These Hedge Funds?

Regal Entertainment Group (NYSE:RGC) was in 11 hedge funds’ portfolio at the end of March. RGC has seen a decrease in activity from the world’s largest hedge funds of late. There were 19 hedge funds in our database with RGC positions at the end of the previous quarter.

In the eyes of most stock holders, hedge funds are perceived as slow, outdated investment tools of yesteryear. While there are over 8000 funds in operation today, we at Insider Monkey choose to focus on the upper echelon of this club, about 450 funds. It is estimated that this group oversees the lion’s share of the smart money’s total asset base, and by monitoring their top equity investments, we have uncovered a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as beneficial, optimistic insider trading activity is a second way to parse down the marketplace. There are a variety of incentives for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if investors understand where to look (learn more here).

Keeping this in mind, it’s important to take a peek at the latest action surrounding Regal Entertainment Group (NYSE:RGC).

What have hedge funds been doing with Regal Entertainment Group (NYSE:RGC)?

At the end of the first quarter, a total of 11 of the hedge funds we track were long in this stock, a change of -42% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Peconic Partners LLC, managed by William Harnisch, holds the biggest position in Regal Entertainment Group (NYSE:RGC). Peconic Partners LLC has a $48.9 million position in the stock, comprising 7.6% of its 13F portfolio. Sitting at the No. 2 spot is Spencer M. Waxman of Shannon River Fund Management, with a $22.2 million position; 2.6% of its 13F portfolio is allocated to the company. Other peers that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies and Richard Driehaus’s Driehaus Capital.

Since Regal Entertainment Group (NYSE:RGC) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there were a few money managers that decided to sell off their entire stakes heading into Q2. Interestingly, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors sold off the largest investment of all the hedgies we key on, totaling close to $5.8 million in stock.. Jeffrey Jon Berney’s fund, TriOaks Capital Management, also sold off its stock, about $5 million worth. These moves are interesting, as total hedge fund interest fell by 8 funds heading into Q2.

How are insiders trading Regal Entertainment Group (NYSE:RGC)?

Bullish insider trading is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time frame, Regal Entertainment Group (NYSE:RGC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Regal Entertainment Group (NYSE:RGC). These stocks are Carmike Cinemas, Inc. (NASDAQ:CKEC), RealD (NYSE:RLD), Dreamworks Animation Skg Inc (NASDAQ:DWA), Cinemark Holdings, Inc. (NYSE:CNK), and Lions Gate Entertainment Corp. (USA) (NYSE:LGF). This group of stocks are the members of the movie production, theaters industry and their market caps match RGC’s market cap.