Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
Regulators Examine Tesla
According to the Wall Street Journal, the SEC is investigating whether Tesla Motors Inc (NASDAQ:TSLA) skirted material disclosure laws by failing to disclose the death of Joshua Brown, a technology enthusiast who was using Tesla’s semi-automated driving technology when he died in a car crash in May. Although Tesla alerted the National Highway Traffic Safety Administration, it failed to release the information to the public through an 8-K filing before the company’s multi-billion dollar secondary offering on May 18 to May 19. Tesla has consistently maintained that the crash was not material. As to whether Tesla was right in not disclosing the matter, various experts say that it is a ‘tough judgment call’ and that there are no clear rules governing the disclosure.
Of the 766 elite funds that we track, 39 owned $1.08 billion in Tesla Motors Inc (NASDAQ:TSLA) shares on March 31, which accounted for 3.60% of the float. Tesla was a popular stock during the first quarter, as there were just 29 funds with $837.44 million worth of Tesla positions on December 31.
AMC Not Budging on Bid Price
Although some Carmike Cinemas, Inc. (NASDAQ:CKEC) shareholders think AMC Entertainment Holdings Inc (NYSE:AMC)‘s $30 per share/$1.1 billion bid for the company is too low, AMC is holding firm. The movie chain recently put out a press release stating:
“We intend to continue to work this week with Carmike to see if the AMC/Carmike transaction can be saved, but we again note that the economics of a transaction get marginal very quickly for AMC above the $30 deal price. Therefore, the likelihood of an AMC/Carmike transaction continues to be at considerable risk.”
Carmike shareholders will vote on whether to sell their company to AMC on July 15. If AMC’s bid for Carmike fails, it looks like the company has a contingency plan. AMC recently announced that it has acquired Odeon & UCI Cinemas Group from a private equity firm for around $1.2 billion. 15 funds in our system had a bullish position in AMC Entertainment Holdings Inc (NYSE:AMC) at the end of the first quarter, while 26 savvy funds owned shares of Carmike Cinemas, Inc. (NASDAQ:CKEC).
On the next page, we’ll examine why United Continental Holdings and Panera Bread are in the spotlight today.