In an investment analysis of The Walt Disney Company (NYSE:DIS), the Disneyworld puns will never stop. So, we apologize for that in advance, but the latest data suggests that one group of investors is actually sour on the company. Curious?
In today’s marketplace, there are a multitude of metrics market participants can use to monitor stocks. A duo of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outpace the market by a significant amount (see just how much).
Equally as useful, optimistic insider trading sentiment is another way to look at the financial markets. Just as you'd expect, there are lots of incentives for an insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).
Keeping this in mind, we're going to analyze the recent info for The Walt Disney Company (NYSE:DIS).
At Q2's end, a total of 51 of the hedge funds we track were long in this stock, a change of -11% from the previous quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully.
Out of the hedge funds we follow, Fisher Asset Management, managed by Ken Fisher, holds the largest position in The Walt Disney Company (NYSE:DIS). Fisher Asset Management has a $526.4 million position in the stock, comprising 1.4% of its 13F portfolio. The second largest stake is held by Egerton Capital Limited, managed by John Armitage, which held a $424.3 million position; the fund has 9.4% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Chris Hohn's Childrens Investment Fund, Ric Dillon's Diamond Hill Capital and Rob Citrone's Discovery Capital Management.
Due to the fact The Walt Disney Company (NYSE:DIS) has witnessed bearish sentiment from the smart money's best and brightest, we can see that there was a specific group of fund managers that slashed their positions entirely in Q1. Intriguingly, Stephen Mandel's Lone Pine Capital sold off the biggest investment of the 450+ funds we track, valued at close to $224.4 million in stock, and Chase Coleman and Feroz Dewan of Tiger Global Management LLC was right behind this move, as the fund dropped about $62.5 million worth. These transactions are interesting, as total hedge fund interest dropped by 6 funds in Q1.
Legal insider trading, particularly when it's bullish, is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time frame, The Walt Disney Company (NYSE:DIS) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to The Walt Disney Company (NYSE:DIS). These stocks are Live Nation Entertainment, Inc. (NYSE:LYV), Starz (NASDAQ:STRZA), The Madison Square Garden Co (NASDAQ:MSG), Time Warner Inc (NYSE:TWX), and News Corp (NASDAQ:NWSA). This group of stocks are in the entertainment - diversified industry and their market caps are similar to DIS's market cap.