Lions Gate Entertainment Corp. (USA) (LGF): Are Hedge Funds Right About This Stock?

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Lions Gate Entertainment Corp. (USA) (NYSE:LGF) was in 24 hedge funds’ portfolio at the end of March. LGF investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. There were 18 hedge funds in our database with LGF positions at the end of the previous quarter.

Lions Gate Entertainment Corp. (USA) (NYSE:LGF)

In the eyes of most stock holders, hedge funds are assumed to be slow, old investment vehicles of years past. While there are more than 8000 funds with their doors open today, we choose to focus on the aristocrats of this club, close to 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total asset base, and by monitoring their top stock picks, we have uncovered a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as key, optimistic insider trading activity is another way to parse down the marketplace. Obviously, there are a number of motivations for an insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this method if “monkeys” know what to do (learn more here).

With all of this in mind, we’re going to take a look at the key action regarding Lions Gate Entertainment Corp. (USA) (NYSE:LGF).

What have hedge funds been doing with Lions Gate Entertainment Corp. (USA) (NYSE:LGF)?

At the end of the first quarter, a total of 24 of the hedge funds we track were long in this stock, a change of 33% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.

According to our comprehensive database, Mark Rachesky’s MHR Fund Management had the biggest position in Lions Gate Entertainment Corp. (USA) (NYSE:LGF), worth close to $1.2185 billion, comprising 43.1% of its total 13F portfolio. On MHR Fund Management’s heels is John Murphy of Alydar Capital, with a $37.9 million position; 2.4% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include David Goel and Paul Ferri’s Matrix Capital Management, John Thaler’s JAT Capital Management and Paul Hudson’s Glade Brook Capital Partners.

As one would reasonably expect, specific money managers were leading the bulls’ herd. MHR Fund Management, managed by Mark Rachesky, initiated the biggest position in Lions Gate Entertainment Corp. (USA) (NYSE:LGF). MHR Fund Management had 1.2185 billion invested in the company at the end of the quarter. David Goel and Paul Ferri’s Matrix Capital Management also initiated a $31.6 million position during the quarter. The other funds with new positions in the stock are John Thaler’s JAT Capital Management, Paul Hudson’s Glade Brook Capital Partners, and Daniel Benton’s Andor Capital Management.

What do corporate executives and insiders think about Lions Gate Entertainment Corp. (USA) (NYSE:LGF)?

Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time period, Lions Gate Entertainment Corp. (USA) (NYSE:LGF) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Lions Gate Entertainment Corp. (USA) (NYSE:LGF). These stocks are Carmike Cinemas, Inc. (NASDAQ:CKEC), RealD (NYSE:RLD), Dreamworks Animation Skg Inc (NASDAQ:DWA), Regal Entertainment Group (NYSE:RGC), and Cinemark Holdings, Inc. (NYSE:CNK). This group of stocks belong to the movie production, theaters industry and their market caps are similar to LGF’s market cap.

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