Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) was in 44 hedge funds’ portfolio at the end of the first quarter of 2013. MPEL investors should pay attention to an increase in enthusiasm from smart money of late. There were 42 hedge funds in our database with MPEL positions at the end of the previous quarter.
In the eyes of most investors, hedge funds are seen as slow, outdated investment tools of years past. While there are over 8000 funds in operation at present, we at Insider Monkey look at the upper echelon of this club, around 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total asset base, and by paying attention to their top picks, we have revealed a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 (check out a sample of our picks).
Just as key, bullish insider trading activity is a second way to parse down the financial markets. Obviously, there are plenty of reasons for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if piggybackers know where to look (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action regarding Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL).
How have hedgies been trading Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL)?
Heading into Q2, a total of 44 of the hedge funds we track held long positions in this stock, a change of 5% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Christian Leone’s Luxor Capital Group had the largest position in Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL), worth close to $144.5 million, accounting for 2.8% of its total 13F portfolio. On Luxor Capital Group’s heels is Discovery Capital Management, managed by Rob Citrone, which held a $96.2 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include J Kevin Kenny Jr’s Emerging Sovereign Group, Paul Reeder and Edward Shapiro’s PAR Capital Management and Brian Kelly’s Asian Century Quest.
Consequently, some big names have been driving this bullishness. Moore Global Investments, managed by Louis Bacon, assembled the most valuable call position in Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL). Moore Global Investments had 58.4 million invested in the company at the end of the quarter. Roberto Mignone’s Bridger Management also made a $42 million investment in the stock during the quarter. The other funds with new positions in the stock are John Wu’s Sureview Capital, George Soros’s Soros Fund Management, and Abby Flamholz and Yehuda Blinder’s ADAR Investment Management.
What do corporate executives and insiders think about Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time frame, Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL). These stocks are Penn National Gaming, Inc (NASDAQ:PENN), Carnival Corporation (NYSE:CCL), MGM Resorts International (NYSE:MGM), Royal Caribbean Cruises Ltd. (NYSE:RCL), and Wynn Resorts, Limited (NASDAQ:WYNN). This group of stocks belong to the resorts & casinos industry and their market caps resemble MPEL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Penn National Gaming, Inc (NASDAQ:PENN) | 31 | 3 | 8 |
| Carnival Corporation (NYSE:CCL) | 36 | 0 | 9 |
| MGM Resorts International (NYSE:MGM) | 37 | 0 | 3 |
| Royal Caribbean Cruises Ltd. (NYSE:RCL) | 26 | 0 | 9 |
| Wynn Resorts, Limited (NASDAQ:WYNN) | 36 | 0 | 6 |
With the returns exhibited by the aforementioned strategies, everyday investors should always watch hedge fund and insider trading activity, and Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) is an important part of this process.
