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Should You Buy Shares of Cedar Fair, L.P. (FUN)?

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Cedar Fair, L.P. (NYSE:FUN).

Is Cedar Fair, L.P. (NYSE:FUN) worth your attention right now? The best stock pickers are in a bearish mood. The number of bullish hedge fund positions shrunk by 2 lately. Cedar Fair, L.P. (NYSE:FUN) was in 10 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with Cedar Fair, L.P. (NYSE:FUN) holdings at the end of the previous quarter. 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 Cobalt International Energy, Inc. (NYSE:CIE), Curtiss-Wright Corp. (NYSE:CW), and Firstmerit Corp (NASDAQ:FMER) to gather more data points.

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At the moment there are a large number of formulas shareholders use to evaluate stocks. A pair of the most underrated formulas are hedge fund and insider trading indicators. our researchers have shown that, historically, those who follow the best picks of the top investment managers can outperform the S&P 500 by a very impressive amount (see the details here).

Keeping this in mind, we’re going to analyze the recent action encompassing Cedar Fair, L.P. (NYSE:FUN).

Hedge fund activity in Cedar Fair, L.P. (NYSE:FUN)

At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long in this stock, decline of 17% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management had the number one position in Cedar Fair, L.P. (NYSE:FUN), worth close to $200.6 million, accounting for 6.6% of its total 13F portfolio. The second largest stake is held by Trafelet Capital, managed by Remy Trafelet, which held a $22 million position; 14.8% of its 13F portfolio is allocated to the company. Some other peers that hold long positions contain Glenn J. Krevlin’s Glenhill Advisors, Renaissance Technologies and Charles Davidson’s Wexford Capital.

Because Cedar Fair, L.P. (NYSE:FUN) has faced a declination in interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their full holdings at the end of the third quarter. At the top of the heap, Alexander Mitchell’s Scopus Asset Management said goodbye to the largest investment of all the hedgies watched by Insider Monkey, worth close to $13.6 million in stock, and John Bader of Halcyon Asset Management was right behind this move, as the fund dumped about $6.6 million worth. These transactions are important to note, as total hedge fund interest dropped by 2 funds at the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to Cedar Fair, L.P. (NYSE:FUN). These stocks are Cobalt International Energy, Inc. (NYSE:CIE), Curtiss-Wright Corp. (NYSE:CW), Firstmerit Corp (NASDAQ:FMER), and Regal Entertainment Group (NYSE:RGC). All of these stocks’ market caps match Cedar Fair, L.P. (NYSE:FUN)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CIE 18 800105 1
CW 17 269563 0
FMER 12 52004 1
RGC 20 102936 1

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $306 million. At the same time, hedge funds we track amassed $243 million worth of Cedar Fair’s shares at the end of September and the stock is least popular one in comparison to the companies from the table. The smart money might not be always right, but it may be better to spend your time in analyzing stocks that hedge funds are more bullish on.

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