We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of December. At Insider Monkey, we follow nearly 835 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Central European Media Enterprises Ltd. (NASDAQ:CETV), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Hedge fund interest in Central European Media Enterprises Ltd. (NASDAQ:CETV) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Sapiens International Corporation N.V. (NASDAQ:SPNS), Futu Holdings Limited (NASDAQ:FUTU), and B&G Foods, Inc. (NYSE:BGS) to gather more data points. Our calculations also showed that CETV isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
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Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader's corona catalyst trades. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's go over the recent hedge fund action regarding Central European Media Enterprises Ltd. (NASDAQ:CETV).
What have hedge funds been doing with Central European Media Enterprises Ltd. (NASDAQ:CETV)?
At the end of the fourth quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the third quarter of 2019. By comparison, 5 hedge funds held shares or bullish call options in CETV a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Among these funds, Alpine Associates held the most valuable stake in Central European Media Enterprises Ltd. (NASDAQ:CETV), which was worth $15 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $7 million worth of shares. Millennium Management, D E Shaw, and GAMCO Investors 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 Alpine Associates allocated the biggest weight to Central European Media Enterprises Ltd. (NASDAQ:CETV), around 0.48% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, dishing out 0.08 percent of its 13F equity portfolio to CETV.
Due to the fact that Central European Media Enterprises Ltd. (NASDAQ:CETV) has witnessed bearish sentiment from hedge fund managers, it's safe to say that there is a sect of hedgies that decided to sell off their entire stakes in the third quarter. Intriguingly, Paul Marshall and Ian Wace's Marshall Wace LLP cut the biggest investment of all the hedgies tracked by Insider Monkey, comprising about $2.3 million in stock. Roger Ibbotson's fund, Zebra Capital Management, also dropped its stock, about $0.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Central European Media Enterprises Ltd. (NASDAQ:CETV) but similarly valued. These stocks are Sapiens International Corporation N.V. (NASDAQ:SPNS), Futu Holdings Limited (NASDAQ:FUTU), B&G Foods, Inc. (NYSE:BGS), and Piper Jaffray Companies (NYSE:PJC). All of these stocks' market caps are closest to CETV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SPNS,10,41193,2 FUTU,3,1257,2 BGS,15,73995,-2 PJC,11,48925,1 Average,9.75,41343,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $41 million in CETV's case. B&G Foods, Inc. (NYSE:BGS) is the most popular stock in this table. On the other hand Futu Holdings Limited (NASDAQ:FUTU) is the least popular one with only 3 bullish hedge fund positions. Central European Media Enterprises Ltd. (NASDAQ:CETV) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st but still beat the market by 12.9 percentage points. Hedge funds were also right about betting on CETV, though not to the same extent, as the stock returned -11.5% during the first four months of 2020 (through May 1st) and outperformed the market as well.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.