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Cedar Fair, L.P. (FUN): Insiders Are Buying, Should You?: Priceline.com Inc (PCLN), Carnival plc (ADR) (CUK)

Cedar Fair, L.P. (NYSE:FUN) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. FUN has seen a decrease in activity from the world’s largest hedge funds of late. There were 11 hedge funds in our database with FUN positions at the end of the previous quarter.

Cedar Fair, L.P. (NYSE:FUN)In the financial world, there are many metrics shareholders can use to analyze their holdings. A pair of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can beat the market by a significant amount (see just how much).

Equally as beneficial, positive insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are a variety of incentives for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).

Now, it’s important to take a gander at the latest action regarding Cedar Fair, L.P. (NYSE:FUN).

How have hedgies been trading Cedar Fair, L.P. (NYSE:FUN)?

In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Yale M. Fergang and Robert W. Medway’s Royal Capital had the most valuable position in Cedar Fair, L.P. (NYSE:FUN), worth close to $40 million, comprising 9.9% of its total 13F portfolio. The second largest stake is held by Trafelet Capital, managed by Remy Trafelet, which held a $34 million position; 2% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Thomas E. Claugus’s GMT Capital, Charles Anderson’s Fox Point Capital Management and Jim Simons’s Renaissance Technologies.

Judging by the fact that Cedar Fair, L.P. (NYSE:FUN) has experienced a declination in interest from hedge fund managers, we can see that there lies a certain “tier” of money managers that slashed their entire stakes in Q4. It’s worth mentioning that Ken Grossman and Glen Schneider’s SG Capital Management dropped the biggest investment of the “upper crust” of funds we monitor, valued at close to $3 million in stock., and Geoffrey Raynor of Q Investments (Specter Holdings) was right behind this move, as the fund cut about $3 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds in Q4.

What have insiders been doing with Cedar Fair, L.P. (NYSE:FUN)?

Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past half-year. Over the latest six-month time frame, Cedar Fair, L.P. (NYSE:FUN) has experienced 2 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 Cedar Fair, L.P. (NYSE:FUN). These stocks are Priceline.com Inc (NASDAQ:PCLN), Carnival plc (ADR) (NYSE:CUK), MakeMyTrip Limited (NASDAQ:MMYT), Orbitz Worldwide, Inc. (NYSE:OWW), and Six Flags Entertainment Corp (NYSE:SIX). This group of stocks are in the general entertainment industry and their market caps resemble FUN’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Priceline.com Inc (NASDAQ:PCLN) 60 0 5
Carnival plc (ADR) (NYSE:CUK) 4 0 12
MakeMyTrip Limited (NASDAQ:MMYT) 5 0 0
Orbitz Worldwide, Inc. (NYSE:OWW) 8 0 4
Six Flags Entertainment Corp (NYSE:SIX) 30 1 5

With the returns shown by our tactics, everyday investors must always keep an eye on hedge fund and insider trading activity, and Cedar Fair, L.P. (NYSE:FUN) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds

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