Is Central European Media Enterprises Ltd. (NASDAQ:CETV) the right investment to pursue these days? Investors who are in the know are taking a bearish view. The number of long hedge fund bets decreased by 4 lately.
According to most investors, hedge funds are viewed as slow, outdated investment tools of yesteryear. While there are greater than 8000 funds in operation today, we look at the top tier of this group, around 450 funds. It is widely believed that this group controls most of the smart money's total capital, and by monitoring their best stock picks, we have uncovered a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as integral, optimistic insider trading activity is another way to parse down the marketplace. There are a number of reasons for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).
With all of this in mind, let's take a look at the key action regarding Central European Media Enterprises Ltd. (NASDAQ:CETV).
At year's end, a total of 6 of the hedge funds we track held long positions in this stock, a change of -40% from one quarter earlier. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Marc Lasry's Avenue Capital had the most valuable position in Central European Media Enterprises Ltd. (NASDAQ:CETV), worth close to $39.8 million, accounting for 7.8% of its total 13F portfolio. Coming in second is J Kevin Kenny Jr of Emerging Sovereign Group, with a $12.9 million position; 1.3% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include John Thiessen's Vertex One Asset Management, Robert Joseph Caruso's Select Equity Group and Rob Citrone's Discovery Capital Management.
Seeing as Central European Media Enterprises Ltd. (NASDAQ:CETV) has witnessed bearish sentiment from the smart money, it's easy to see that there were a few hedgies who were dropping their positions entirely in Q4. Interestingly, Israel Englander's Millennium Management cut the largest position of the "upper crust" of funds we watch, valued at close to $0.2 million in stock.. D. E. Shaw's fund, D E Shaw, also dumped its stock, about $0.1 million worth. These moves are interesting, as total hedge fund interest dropped by 4 funds in Q4.
Bullish insider trading is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time period, Central European Media Enterprises Ltd. (NASDAQ:CETV) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also examine hedge fund and insider activity in other stocks similar to Central European Media Enterprises Ltd. (NASDAQ:CETV). These stocks are Nexstar Broadcasting Group, Inc. (NASDAQ:NXST), Outdoor Channel Holdings, Inc. (NASDAQ:OUTD), Gray Television, Inc. (NYSE:GTN), Entravision Communication (NYSE:EVC), and Fisher Communications, Inc. (NASDAQ:FSCI). This group of stocks are the members of the broadcasting - tv industry and their market caps resemble CETV's market cap.