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Hedge Funds Were Selling These 10 Mid-Caps In Q3, Part 1

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The third quarter was a volatile one, which prompted many investors, both big and small, to re-evaluate their portfolios and ferret out what they perceived as potential weak links. We witnessed a collective flight from several dozen stocks during the quarter, including ten notable mid-cap stocks. In this first part of a two-part series, we’ll highlight five of those ten stocks that witnessed a large third-quarter decline in how many smart money investors tracked by Insider Monkey were long those stocks. Be sure to check out part two for the remaining five stocks that hedge funds were fleeing.

Viacom, Inc. (NASDAQ:VIAB)

– Elite Investors with Long Positions (as of September 30): 35

– Aggregate Value of Elite Investors’ Holdings (as of September 30): $1.27 billion

We’ll start with Viacom, Inc. (NASDAQ:VIAB), which was held in the portfolios of 47 of the investors in our database on June 30, with their positions totaling $2.25 billion at that time. Shares of the media company fell by about 33% in the third quarter. After staging a solid rally from its 52-week low in mid-August, the stock pulled back this week, dropping by nearly 10%. Mario Gabelli of GAMCO Investors, the company’s second-largest shareholder, told Reuters on Wednesday that Viacom, Inc. (NASDAQ:VIAB) should sell a stake in Paramount Pictures to Alibaba Group Holding Ltd (NYSE:BABA). It was reported that Gabelli also called into question the ability of Viacom Executive Chairman Sumner Redstone, whose ex-girlfriend filed a lawsuit against him late last month that demanded he receive a mental examination. Clint Carlson’s Carlson Capital was one of the funds to sell off its stake in Viacom during the third quarter, a 323,900-share position that it opened in the second quarter.

Check Point Software Technologies Ltd. (NASDAQ:CHKP)

– Elite Investors with Long Positions (as of September 30): 32

– Aggregate Value of Elite Investors’ Holdings (as of September 30): $1.42 billion

As we reported late last month, hedge funds were selling Check Point Software Technologies Ltd. (NASDAQ:CHKP) in the third quarter, with ownership falling by ten during a volatile quarter for the stock, that ended with it trading relatively flat for the period. Despite a total of ten less investors that we track being long Check Point by the end of the quarter, the value of their collective holdings slid only marginally, from $1.48 billion, suggesting that it was primarily investors with smaller positions that vacated the stock and that larger shareholders retained their conviction in it. Check Point Software Technologies Ltd. (NASDAQ:CHKP) has enjoyed a strong fourth quarter, gaining nearly 10%. Needham has Check Point Software rated as a ‘Buy’ and believes that it is one of a handful of internet security providers that is taking over the market. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, closed a position of just under 1.0 million shares of Check Point Software during the third quarter.

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