Cinemark Holdings, Inc. (NYSE:CNK) was in 19 hedge funds’ portfolio at the end of the fourth quarter of 2012. CNK has experienced an increase in hedge fund sentiment lately. There were 16 hedge funds in our database with CNK positions at the end of the previous quarter.
According to most stock holders, hedge funds are assumed to be worthless, outdated investment vehicles of the past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey look at the upper echelon of this club, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by monitoring their highest performing equity investments, we have identified a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as key, optimistic insider trading sentiment is another way to parse down the stock market universe. Obviously, there are plenty of reasons for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).
With these “truths” under our belt, we’re going to take a glance at the latest action surrounding Cinemark Holdings, Inc. (NYSE:CNK).
How are hedge funds trading Cinemark Holdings, Inc. (NYSE:CNK)?
At year’s end, a total of 19 of the hedge funds we track were bullish in this stock, a change of 19% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, Osterweis Capital Management, managed by John Osterweis, holds the biggest position in Cinemark Holdings, Inc. (NYSE:CNK). Osterweis Capital Management has a $88 million position in the stock, comprising 3.9% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $64 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Mark Broach’s Manatuck Hill Partners, William Harnisch’s Peconic Partners LLC and Amy Minella’s Cardinal Capital.
Consequently, key hedge funds have been driving this bullishness. Ascend Capital, managed by Malcolm Fairbairn, established the largest position in Cinemark Holdings, Inc. (NYSE:CNK). Ascend Capital had 13 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Richard Driehaus’s Driehaus Capital, Mike Vranos’s Ellington, and Paul Tudor Jones’s Tudor Investment Corp.
What have insiders been doing with Cinemark Holdings, Inc. (NYSE:CNK)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, Cinemark Holdings, Inc. (NYSE:CNK) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Cinemark Holdings, Inc. (NYSE:CNK) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.