Is The Madison Square Garden Co (MSG) Going to Burn These Hedge Funds?

The Madison Square Garden Co (NASDAQ:MSG) has seen an increase in support from the world’s most elite money managers recently.

If you’d ask most stock holders, hedge funds are viewed as unimportant, old investment tools of the past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the top tier of this group, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by monitoring their top picks, we have determined a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as integral, positive insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are a variety of motivations for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if piggybackers understand what to do (learn more here).

With all of this in mind, let’s take a peek at the recent action encompassing The Madison Square Garden Co (NASDAQ:MSG).

What have hedge funds been doing with The Madison Square Garden Co (NASDAQ:MSG)?

At the end of the first quarter, a total of 27 of the hedge funds we track were bullish in this stock, a change of 29% from the first quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, Christian Leone’s Luxor Capital Group had the largest position in The Madison Square Garden Co (NASDAQ:MSG), worth close to $338.7 million, comprising 6.5% of its total 13F portfolio. Sitting at the No. 2 spot is Mario Gabelli of GAMCO Investors, with a $174.9 million position; 1.1% of its 13F portfolio is allocated to the company. Other peers with similar optimism include John W. Rogers’s Ariel Investments, Mason Hawkins’s Southeastern Asset Management and John Thaler’s JAT Capital Management.

As aggregate interest increased, key money managers were leading the bulls’ herd. Newbrook Capital Advisors, managed by Robert Boucai, established the biggest position in The Madison Square Garden Co (NASDAQ:MSG). Newbrook Capital Advisors had 34.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $8.7 million position during the quarter. The other funds with brand new MSG positions are George Soros’s Soros Fund Management, Glenn Russell Dubin’s Highbridge Capital Management, and D. E. Shaw’s D E Shaw.

What have insiders been doing with The Madison Square Garden Co (NASDAQ:MSG)?

Insider buying is particularly usable when the company in question has seen transactions within the past 180 days. Over the last 180-day time frame, The Madison Square Garden Co (NASDAQ:MSG) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to The Madison Square Garden Co (NASDAQ:MSG). These stocks are Bona Film Group Ltd (ADR) (NASDAQ:BONA), World Wrestling Entertainment, Inc. (NYSE:WWE), IMAX Corporation (USA) (NYSE:IMAX), Live Nation Entertainment, Inc. (NYSE:LYV), and Starz (NASDAQ:STRZA). This group of stocks are the members of the entertainment – diversified industry and their market caps are closest to MSG’s market cap.

With the returns demonstrated by the aforementioned studies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and The Madison Square Garden Co (NASDAQ:MSG) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds