Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Time Warner Inc (NYSE:TWX) investors should pay attention to an increase in hedge fund interest of late. TWX was in 69 hedge funds’ portfolios at the end of the third quarter of 2015. There were 68 hedge funds in our database with TWX positions at the end of the previous quarter. At the end of this article we will also compare TWX to other stocks including Telefonica S.A. (ADR) (NYSE:TEF), America Movil SAB de CV (ADR) (NYSE:AMX), and Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) to get a better sense of its popularity.
Follow Warner Media Llc (NYSE:TWX)
Follow Warner Media Llc (NYSE:TWX)
To the average investor, there is a multitude of metrics stock traders put to use to value stocks. A pair of the less known metrics is composed of hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the top investment managers can beat the S&P 500 by a superb amount (see the details here).
Now, let’s analyze the key action surrounding Time Warner Inc (NYSE:TWX).
How have hedgies been trading Time Warner Inc (NYSE:TWX)?
At Q3’s end, a total of 69 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 1% from the previous quarter. With the smart money’s capital changing hands, there exist a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Daniel S. Och’s OZ Management has the most valuable position in Time Warner Inc (NYSE:TWX), worth close to $804.9 million, amounting to 2.8% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds an $301.3 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions comprise Barry Rosenstein’s JANA Partners, D. E. Shaw’s D E Shaw, and David Einhorn’s Greenlight Capital.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Corvex Capital, managed by Keith Meister, established a position in Time Warner Inc (NYSE:TWX). Corvex Capital had $68.8 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made an $51.6 million investment in the stock during the quarter. The following funds were also among the new TWX investors: Steven Tananbaum’s GoldenTree Asset Management, Eric Bannasch’s Cadian Capital, and James Dinan’s York Capital Management.
Let’s go over hedge fund activity in other stocks similar to Time Warner Inc (NYSE:TWX). These stocks are Telefonica S.A. (ADR) (NYSE:TEF), America Movil SAB de CV (ADR) (NYSE:AMX), Royal Bank of Scotland Group plc (ADR) (NYSE:RBS), and Express Scripts Holding Company (NASDAQ:ESRX). This group of stocks’ market valuations are closest to TWX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEF | 5 | 10456 | -1 |
| AMX | 12 | 239063 | -2 |
| RBS | 6 | 7977 | -7 |
| ESRX | 58 | 3434031 | -4 |
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $923 million. That figure was $4321 million in TWX’s case. Express Scripts Holding Company (NASDAQ:ESRX) is the most popular stock in this table. On the other hand, Telefonica S.A. (ADR) (NYSE:TEF) is the least popular one. In comparison, Time Warner Inc (NYSE:TWX) with 69 bullish hedge fund positions is even more popular than Express Scripts Holding Company (NASDAQ:ESRX). Further research may indicate that this stock could make for a good addition to your portfolios.
