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Hedge Funds Have Never Been This Bullish On Six Flags Entertainment Corp (SIX)

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With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was Six Flags Entertainment Corp (NYSE:SIX).

Six Flags Entertainment Corp (NYSE:SIX) was in 42 hedge funds' portfolios at the end of September. 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 new all time high. SIX shareholders have witnessed an increase in enthusiasm from smart money lately. There were 36 hedge funds in our database with SIX positions at the end of the second quarter. Our calculations also showed that SIX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Michael Gelband of ExodusPoint Capital

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 view the recent hedge fund action regarding Six Flags Entertainment Corp (NYSE:SIX).

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

At the end of September, a total of 42 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SIX over the last 25 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is SIX A Good Stock To Buy?
Is SIX A Good Stock To Buy?

More specifically, H Partners Management was the largest shareholder of Six Flags Entertainment Corp (NYSE:SIX), with a stake worth $335.8 million reported as of the end of September. Trailing H Partners Management was Citadel Investment Group, which amassed a stake valued at $95.3 million. 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, setting aside 9 percent of its 13F equity portfolio to SIX.

Consequently, key hedge funds were leading the bulls' herd. Simcoe Capital Management, managed by Jeffrey Jacobowitz, initiated the most valuable 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 made a $19.4 million investment in the stock 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 similar to Six Flags Entertainment Corp (NYSE:SIX). 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 caps resemble SIX's market cap.

[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 28.6% in 2021 through November 30th and still beat the market by 5.6 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 -14% since the end of the third quarter (through 11/30) 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 most of these stocks already outperformed the market since 2019.

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