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Did Hedge Funds Catch A Break With Six Flags Entertainment Corp (SIX)?

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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. Hedge funds' consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn't been kind to hedge funds. In this article we look at how hedge funds traded Six Flags Entertainment Corp (NYSE:SIX) and determine whether the smart money was really smart about this stock.

Six Flags Entertainment Corp (NYSE:SIX) investors should be aware of an increase in hedge fund interest lately. Six Flags Entertainment Corp (NYSE:SIX) was in 42 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 41. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SIX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we're going to take a peek at the fresh hedge fund action encompassing Six Flags Entertainment Corp (NYSE:SIX).

Ken Griffin CITADEL INVESTMENT GROUP
Ken Griffin CITADEL INVESTMENT GROUP

Ken Griffin of Citadel Investment Group

Do Hedge Funds Think SIX Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 42 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. By comparison, 37 hedge funds held shares or bullish call options in SIX a year ago. With the smart money's capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Among these funds, H Partners Management held the most valuable stake in Six Flags Entertainment Corp (NYSE:SIX), which was worth $335.8 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $95.3 million worth of shares. Thunderbird Partners, Arrowstreet Capital, and Jericho Capital Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position H Partners Management allocated the biggest weight to Six Flags Entertainment Corp (NYSE:SIX), around 30.44% of its 13F portfolio. Altai Capital is also relatively very bullish on the stock, earmarking 9 percent of its 13F equity portfolio to SIX.

Consequently, specific money managers were leading the bulls' herd. Simcoe Capital Management, managed by Jeffrey Jacobowitz, established the largest position in Six Flags Entertainment Corp (NYSE:SIX). Simcoe Capital Management had $44.4 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $19.4 million position during the quarter. The other funds with brand new SIX positions are Mark Coe's Intrinsic Edge Capital, Eduardo Abush's Waterfront Capital Partners, and Michael Gelband's ExodusPoint Capital.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Six Flags Entertainment Corp (NYSE:SIX) but similarly valued. We will take a look at Millicom International Cellular S.A. (NASDAQ:TIGO), VEON Ltd. (NASDAQ:VEON), Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), BRP Group, Inc. (NASDAQ:BRP), Ameris Bancorp (NASDAQ:ABCB), Karuna Therapeutics, Inc. (NASDAQ:KRTX), and Walker & Dunlop Inc. (NYSE:WD). This group of stocks' market values resemble SIX's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TIGO,7,57120,0 VEON,15,81991,2 ARNA,35,619838,1 BRP,21,194072,8 ABCB,15,36045,0 KRTX,19,398328,1 WD,15,151415,4 Average,18.1,219830,2.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.1 hedge funds with bullish positions and the average amount invested in these stocks was $220 million. That figure was $1046 million in SIX's case. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) is the most popular stock in this table. On the other hand Millicom International Cellular S.A. (NASDAQ:TIGO) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Six Flags Entertainment Corp (NYSE:SIX) is more popular among hedge funds. Our overall hedge fund sentiment score for SIX is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, SIX wasn't nearly as popular as these 5 stocks and hedge funds that were betting on SIX were disappointed as the stock returned -7.1% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.