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Hedge Funds Are Buying Lions Gate Entertainment Corp. (USA) (LGF)

What’s a smart Lions Gate Entertainment Corp. (USA) (NYSE:LGF) investor to do?

To the average investor, there are dozens of metrics investors can use to track the equity markets. Two of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can outclass the S&P 500 by a solid margin (see just how much).

Equally as useful, optimistic insider trading activity is another way to look at the marketplace. Just as you’d expect, there are many motivations for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the useful potential of this strategy if you understand where to look (learn more here).

Now that that’s out of the way, we’re going to study the recent info about Lions Gate Entertainment Corp. (USA) (NYSE:LGF).

What does the smart money think about Lions Gate Entertainment Corp. (USA) (NYSE:LGF)?

At the end of the second quarter, a total of 26 of the hedge funds we track were long in this stock, a change of 8% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly.

Lions Gate Entertainment Corp. (USA) (NYSE:LGF)Out of the hedge funds we follow, MHR Fund Management, managed by Mark Rachesky, holds the largest position in Lions Gate Entertainment Corp. (USA) (NYSE:LGF). MHR Fund Management has a $1.4082 billion position in the stock, comprising 48.6% of its 13F portfolio. Sitting at the No. 2 spot is Glade Brook Capital Partners, managed by Paul Hudson, which held a $40.8 million position; the fund has 6.9% of its 13F portfolio invested in the stock. Other peers that are bullish include David Goel and Paul Ferri’s Matrix Capital Management, Donald Chiboucis’s Columbus Circle Investors and John Murphy’s Alydar Capital.

Now, certain bigger names have jumped into Lions Gate Entertainment Corp. (USA) (NYSE:LGF) headfirst. MHR Fund Management, managed by Mark Rachesky, created the most valuable position in Lions Gate Entertainment Corp. (USA) (NYSE:LGF). MHR Fund Management had 1.4082 billion invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $80.8 million investment in the stock during the quarter. The other funds with brand new LGF positions are Paul Hudson’s Glade Brook Capital Partners, David Goel and Paul Ferri’s Matrix Capital Management, and Donald Chiboucis’s Columbus Circle Investors.

Insider trading activity in Lions Gate Entertainment Corp. (USA) (NYSE:LGF)

Insider buying is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time frame, Lions Gate Entertainment Corp. (USA) (NYSE:LGF) has experienced zero unique insiders purchasing, and zero 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 Lions Gate Entertainment Corp. (USA) (NYSE:LGF). These stocks are Carmike Cinemas, Inc. (NASDAQ:CKEC), RealD (NYSE:RLD), Dreamworks Animation Skg Inc (NASDAQ:DWA), Regal Entertainment Group (NYSE:RGC), and Cinemark Holdings, Inc. (NYSE:CNK). This group of stocks are the members of the movie production, theaters industry and their market caps are similar to LGF’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Carmike Cinemas, Inc. (NASDAQ:CKEC) 14 0 0
RealD (NYSE:RLD) 12 0 0
Dreamworks Animation Skg Inc (NASDAQ:DWA) 13 0 0
Regal Entertainment Group (NYSE:RGC) 13 0 0
Cinemark Holdings, Inc. (NYSE:CNK) 23 0 0

Using the results demonstrated by Insider Monkey’s analyses, regular investors must always pay attention to hedge fund and insider trading activity, and Lions Gate Entertainment Corp. (USA) (NYSE:LGF) is no exception.

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