Should You Avoid Cinemark Holdings, Inc. (CNK)?

Does Cinemark Holdings, Inc. (NYSE:CNK) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

Cinemark Holdings, Inc. (NYSE:CNK) has seen a decrease in activity from the world’s largest hedge funds in recent months. CNK was in 17 hedge funds’ portfolios at the end of the third quarter of 2016. There were 18 hedge funds in our database with CNK positions at the end of the previous quarter. At the end of this article we will also compare CNK to other stocks including Thor Industries, Inc. (NYSE:THO), Ionis Pharmaceuticals Inc (NASDAQ:IONS), and LATAM Airlines Group SA (ADR) (NYSE:LFL) to get a better sense of its popularity.

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Now, let’s go over the fresh action regarding Cinemark Holdings, Inc. (NYSE:CNK).

How have hedgies been trading Cinemark Holdings, Inc. (NYSE:CNK)?

Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, down 6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CNK over the last 5 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John Osterweis’ Osterweis Capital Management has the most valuable position in Cinemark Holdings, Inc. (NYSE:CNK), worth close to $75.1 million, comprising 4.5% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group holding a $72.7 million position. Some other professional money managers that hold long positions consist of Jim Simons’ Renaissance Technologies, Steve Cohen’s Point72 Asset Management and Cliff Asness’ AQR Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Seeing as Cinemark Holdings, Inc. (NYSE:CNK) has weathered falling interest from the smart money, logic holds that there exists a select few hedge funds that slashed their entire stakes last quarter. At the top of the heap, Greg Poole’s Echo Street Capital Management got rid of the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth close to $9.1 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dropped its stock, about $7.4 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Cinemark Holdings, Inc. (NYSE:CNK). These stocks are Thor Industries, Inc. (NYSE:THO), Ionis Pharmaceuticals Inc (NASDAQ:IONS), LATAM Airlines Group SA (ADR) (NYSE:LFL), and Endurance Specialty Holdings Ltd. (NYSE:ENH). This group of stocks’ market values are similar to CNK’s market value.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $281 million in CNK’s case. Thor Industries, Inc. (NYSE:THO) is the most popular stock in this table. On the other hand LATAM Airlines Group SA (ADR) (NYSE:LFL) is the least popular one with only 8 bullish hedge fund positions. Cinemark Holdings, Inc. (NYSE:CNK) 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 THO might be a better candidate to consider taking a long position in.

Disclosure: None