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Hedge Funds Are Crazy About National CineMedia, Inc. (NCMI)

The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded National CineMedia, Inc. (NASDAQ:NCMI) based on those filings.

Is National CineMedia, Inc. (NASDAQ:NCMI) ready to rally soon? The smart money is turning bullish. The number of long hedge fund bets inched up by 1 recently. Our calculations also showed that ncmi isn’t among the 30 most popular stocks among hedge funds. NCMI was in 15 hedge funds’ portfolios at the end of the third quarter of 2018. There were 14 hedge funds in our database with NCMI positions at the end of the previous quarter.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

RENAISSANCE TECHNOLOGIES

We’re going to take a look at the recent hedge fund action surrounding National CineMedia, Inc. (NASDAQ:NCMI).

Hedge fund activity in National CineMedia, Inc. (NASDAQ:NCMI)

Heading into the fourth quarter of 2018, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in NCMI at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with NCMI Positions

According to Insider Monkey’s hedge fund database, Joe Milano’s Greenhouse Funds has the most valuable position in National CineMedia, Inc. (NASDAQ:NCMI), worth close to $19.6 million, comprising 4.7% of its total 13F portfolio. On Greenhouse Funds’s heels is Ken Griffin of Citadel Investment Group, with a $5.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that are bullish comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies and Matthew Hulsizer’s PEAK6 Capital Management.

As one would reasonably expect, key money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the largest position in National CineMedia, Inc. (NASDAQ:NCMI). Arrowstreet Capital had $5.6 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $1.2 million position during the quarter. The only other fund with a new position in the stock is Roger Ibbotson’s Zebra Capital Management.

Let’s go over hedge fund activity in other stocks similar to National CineMedia, Inc. (NASDAQ:NCMI). These stocks are BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), Connecticut Water Service, Inc. (NASDAQ:CTWS), CytomX Therapeutics, Inc. (NASDAQ:CTMX), and Forrester Research, Inc. (NASDAQ:FORR). This group of stocks’ market caps resemble NCMI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BCRX 20 345445 5
CTWS 6 26624 -2
CTMX 19 144953 0
FORR 9 52008 0
Average 13.5 142258 0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $46 million in NCMI’s case. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is the most popular stock in this table. On the other hand Connecticut Water Service, Inc. (NASDAQ:CTWS) is the least popular one with only 6 bullish hedge fund positions. National CineMedia, Inc. (NASDAQ:NCMI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BCRX might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.

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