The Walt Disney Company (NYSE:DIS) investors should be aware of an increase in activity from the world's largest hedge funds recently.
To most investors, hedge funds are seen as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey look at the moguls of this group, close to 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry's total asset base, and by paying attention to their top investments, we have found a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, bullish insider trading activity is a second way to parse down the investments you're interested in. Just as you'd expect, there are many incentives for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this method if investors know what to do (learn more here).
With all of this in mind, we're going to take a glance at the latest action regarding The Walt Disney Company (NYSE:DIS).
At Q1's end, a total of 57 of the hedge funds we track held long positions in this stock, a change of 14% from the previous quarter. With hedge funds' sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in The Walt Disney Company (NYSE:DIS). Fisher Asset Management has a $474.4 million position in the stock, comprising 1.3% of its 13F portfolio. Coming in second is Egerton Capital Limited, managed by John Armitage, which held a $415.7 million position; the fund has 10.3% of its 13F portfolio invested in the stock. Other peers with similar optimism include Ken Griffin's Citadel Investment Group, Chris Hohn's Childrens Investment Fund and Stephen Mandel's Lone Pine Capital.
As one would reasonably expect, some big names were breaking ground themselves. Tiger Global Management LLC, managed by Chase Coleman and Feroz Dewan, initiated the largest position in The Walt Disney Company (NYSE:DIS). Tiger Global Management LLC had 62.5 million invested in the company at the end of the quarter. Donald Chiboucis's Columbus Circle Investors also made a $32.6 million investment in the stock during the quarter. The other funds with brand new DIS positions are Matthew Tewksbury's Stevens Capital Management, Ray Dalio's Bridgewater Associates, and John Wu's Sureview Capital.
Insider buying is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time frame, The Walt Disney Company (NYSE:DIS) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
Let's also examine hedge fund and insider activity in other stocks similar to The Walt Disney Company (NYSE:DIS). These stocks are Live Nation Entertainment, Inc. (NYSE:LYV), Starz (NASDAQ:STRZA), The Madison Square Garden Co (NASDAQ:MSG), Time Warner Inc (NYSE:TWX), and News Corp (NASDAQ:NWSA). This group of stocks are the members of the entertainment - diversified industry and their market caps are similar to DIS's market cap.