Cedar Fair, L.P. (FUN): Insiders and Hedge Funds Aren’t Crazy About It

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Is Cedar Fair, L.P. (NYSE:FUN) a good investment?

In today’s marketplace, there are dozens of indicators market participants can use to analyze Mr. Market. Some of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outperform the market by a healthy margin (see just how much).

Equally as necessary, bullish insider trading sentiment is a second way to analyze the investments you’re interested in. Obviously, there are a number of motivations for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this strategy if piggybackers understand what to do (learn more here).

Now that that’s out of the way, it’s important to analyze the latest info for Cedar Fair, L.P. (NYSE:FUN).

Cedar Fair, L.P. (NYSE:FUN)

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

Heading into Q3, a total of 10 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly.

Out of the hedge funds we follow, Highland Capital Management, managed by James Dondero, holds the largest position in Cedar Fair, L.P. (NYSE:FUN). Highland Capital Management has a $36.9 million position in the stock, comprising 2.8% of its 13F portfolio. On Highland Capital Management’s heels is Trafelet Capital, managed by Remy Trafelet, which held a $31.4 million position; the fund has 20.1% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Yale M. Fergang and Robert W. Medway’s Royal Capital, Thomas E. Claugus’s GMT Capital and Jim Simons’s Renaissance Technologies.

Due to the fact Cedar Fair, L.P. (NYSE:FUN) has faced dropping sentiment from upper-tier hedge fund managers, it’s safe to say that there exists a select few hedgies that decided to sell off their full holdings at the end of the second quarter. Interestingly, Charles Anderson’s Fox Point Capital Management cut the biggest stake of all the hedgies we monitor, valued at close to $9.9 million in stock, and Jon Bauer of Contrarian Capital was right behind this move, as the fund said goodbye to about $1.9 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Cedar Fair, L.P. (NYSE:FUN)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in focus has seen transactions within the past six months. Over the last six-month time frame, Cedar Fair, L.P. (NYSE:FUN) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Cedar Fair, L.P. (NYSE:FUN). These stocks are Priceline.com Inc (NASDAQ:PCLN), Carnival plc (ADR) (NYSE:CUK), MakeMyTrip Limited (NASDAQ:MMYT), Orbitz Worldwide, Inc. (NYSE:OWW), and Six Flags Entertainment Corp (NYSE:SIX). This group of stocks are the members of the general entertainment industry and their market caps are closest to FUN’s market cap.

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