Is CTC Media, Inc. (CTCM) Going to Burn These Hedge Funds?

Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to CTC Media, Inc. (NASDAQ:CTCM) changed recently.

Is CTC Media, Inc. (NASDAQ:CTCM) going to take off soon? The best stock pickers are becoming less confident. The number of long hedge fund bets decreased by 2 lately. Some credit behind the shaky confidence can be given to the dismal stock performance, as CTC Media, Inc. (NASDAQ:CTCM) lost 22.91% value during the third quarter. For a complete understanding of the hedge fund sentiment, we will cover hedge funds holding stakes in CTC Media, Inc. (NASDAQ:CTCM), at the end of September.

The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Heritage Oaks Bancorp (NASDAQ:HEOP), Northern Oil & Gas, Inc. (NYSEMKT:NOG), and Synutra International, Inc. (NASDAQ:SYUT) to gather more data points.

In today’s marketplace there are tons of metrics shareholders use to size up their stock investments. Two of the most innovative metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top money managers can outperform the S&P 500 by a very impressive amount (see the details here).

Now, we’re going to take a peek at the fresh action regarding CTC Media, Inc. (NASDAQ:CTCM).

How are hedge funds trading CTC Media, Inc. (NASDAQ:CTCM)?

At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a decrease of 22% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Ahmet Okumus’ Okumus Fund Management has the number one position in CTC Media, Inc. (NASDAQ:CTCM), worth close to $3 million, accounting for 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Satyen Mehta of Neon Liberty Capital Management, with a $2.9 million position; 4.9% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish encompass Renaissance Technologies, GLG Partners, and Ken Griffin’s Citadel Investment Group.

Seeing as CTC Media, Inc. (NASDAQ:CTCM) has experienced a bearish sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of hedge funds who were dropping their full holdings last quarter. At the top of the heap, David Dreman’s Dreman Value Management cut the biggest stake of the 700 funds tracked by Insider Monkey, valued at about $0.9 million in stock, and Ken Gray and Steve Walsh’s Bryn Mawr Capital was right behind this move, as the fund cut about $0.4 million worth of shares. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to CTC Media, Inc. (NASDAQ:CTCM). We will take a look at Heritage Oaks Bancorp (NASDAQ:HEOP), Northern Oil & Gas, Inc. (NYSEMKT:NOG), Synutra International, Inc. (NASDAQ:SYUT), and Lion Biotechnologies Inc (NASDAQ:LBIO). All of these stocks’ market caps match CTC Media, Inc. (NASDAQ:CTCM)’s market cap.

As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $8 million in CTC Media, Inc. (NASDAQ:CTCM)’s case. Lion Biotechnologies Inc (NASDAQ:LBIO) is the most popular stock in this table. On the other hand, Heritage Oaks Bancorp (NASDAQ:HEOP) is the least popular one with only 4 bullish hedge fund positions. CTC Media, Inc. (NASDAQ:CTCM) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Lion Biotechnologies Inc (NASDAQ:LBIO) might be a better candidate to consider a long position.