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

Because Lions Gate Entertainment Corp. (USA) (NYSE:LGF) has faced a decline in interest from the smart money, we can see that there lies a certain “tier” of funds who were dropping their full holdings last quarter. Intriguingly, Alan Fournier’s Pennant Capital Management sold off the largest position of the “upper crust” of funds tracked by Insider Monkey, comprising about $99.6 million in stock. Solomon Kumin’s fund, Folger Hill Asset Management, also cut its stock, about $18.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 12 funds last quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Lions Gate Entertainment Corp. (USA) (NYSE:LGF) but similarly valued. These stocks are NuVasive, Inc. (NASDAQ:NUVA), Two Harbors Investment Corp (NYSE:TWO), Black Stone Minerals LP (NYSE:BSM), and Integra Lifesciences Holdings Corp (NASDAQ:IART). This group of stocks’ market valuations are closest to LGF’s market valuation.

As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $162 million. That figure was $971 million in LGF’s case. NuVasive, Inc. (NASDAQ:NUVA) is the most popular stock in this table. On the other hand Black Stone Minerals LP (NYSE:BSM) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Lions Gate Entertainment Corp. (USA) (NYSE:LGF) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and have a lot more money invested in it, it may still be a good idea to analyze it in detail and potentially include it in your portfolio, bearing in mind that a lot of hedge funds fled the stock in Q3.

Disclosure: None