We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Peltz's recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards AMC Networks Inc (NASDAQ:AMCX).
AMC Networks Inc (NASDAQ:AMCX) was in 19 hedge funds' portfolios at the end of the fourth quarter of 2018. AMCX investors should be aware of a decrease in hedge fund interest recently. There were 21 hedge funds in our database with AMCX holdings at the end of the previous quarter. Our calculations also showed that amcx isn't among the 30 most popular stocks among hedge funds.
In the eyes of most traders, hedge funds are assumed to be slow, old investment vehicles of yesteryear. While there are over 8000 funds in operation at present, We choose to focus on the leaders of this club, around 750 funds. It is estimated that this group of investors handle bulk of all hedge funds' total capital, and by tailing their finest equity investments, Insider Monkey has deciphered many investment strategies that have historically beaten the S&P 500 index. Insider Monkey's flagship hedge fund strategy outrun the S&P 500 index by nearly 5 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We're going to take a look at the key hedge fund action surrounding AMC Networks Inc (NASDAQ:AMCX).
What have hedge funds been doing with AMC Networks Inc (NASDAQ:AMCX)?
Heading into the first quarter of 2019, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards AMCX over the last 14 quarters. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in AMC Networks Inc (NASDAQ:AMCX) was held by GAMCO Investors, which reported holding $49.4 million worth of stock at the end of September. It was followed by Omega Advisors with a $44.3 million position. Other investors bullish on the company included AQR Capital Management, Horizon Asset Management, and GLG Partners.
Because AMC Networks Inc (NASDAQ:AMCX) has experienced declining sentiment from the smart money, it's easy to see that there exists a select few money managers that slashed their entire stakes heading into Q3. At the top of the heap, Jim Simons's Renaissance Technologies cut the biggest position of the "upper crust" of funds monitored by Insider Monkey, valued at close to $4.9 million in stock. Steve Cohen's fund, Point72 Asset Management, also sold off its stock, about $1.7 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds heading into Q3.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as AMC Networks Inc (NASDAQ:AMCX) but similarly valued. We will take a look at BankUnited, Inc. (NYSE:BKU), Generac Holdings Inc. (NYSE:GNRC), RLI Corp. (NYSE:RLI), and Dicks Sporting Goods Inc (NYSE:DKS). This group of stocks' market valuations resemble AMCX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BKU,21,459136,-6 GNRC,21,111917,-3 RLI,12,142321,1 DKS,22,168865,1 Average,19,220560,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $221 million. That figure was $173 million in AMCX's case. Dicks Sporting Goods Inc (NYSE:DKS) is the most popular stock in this table. On the other hand RLI Corp. (NYSE:RLI) is the least popular one with only 12 bullish hedge fund positions. AMC Networks Inc (NASDAQ:AMCX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately AMCX wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); AMCX investors were disappointed as the stock returned 6.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.