To many of your peers, hedge funds are seen as delayed, old financial tools of an era lost to time. Although there are more than 8,000 hedge funds in operation today, Insider Monkey focuses on the crème de la crème of this group, close to 525 funds. It is assumed that this group has its hands on most of the hedge fund industry’s total capital, and by monitoring their highest performing equity investments, we’ve unsheathed a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as crucial, optimistic insider trading activity is another way to look at the world of equities. There are many reasons for a bullish insider to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” understand where to look (learn more here).
Keeping this in mind, it’s important to examine the recent info about Live Nation Entertainment, Inc. (NYSE:LYV).
How have hedgies been trading Live Nation Entertainment, Inc. (NYSE:LYV)?
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 -4% from the previous 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 increasing their stakes substantially.
Out of the hedge funds we follow, Natixis Global Asset Management’s Harris Associates had the largest position in Live Nation Entertainment, Inc. (NYSE:LYV), worth close to $167.6 million, accounting for 0.4% of its total 13F portfolio. On Harris Associates’s heels is Fine Capital Partners, managed by Debra Fine, which held a $107.1 million position; the fund has 9.8% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Murray Stahl’s Horizon Asset Management, Wallace Weitz’s Wallace R. Weitz & Co. and Charles Akre’s Akre Capital Management.
As Live Nation Entertainment, Inc. (NYSE:LYV) has witnessed a fall in interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedgies that elected to cut their full holdings last quarter. Intriguingly, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC dropped the largest position of the “upper crust” of funds we monitor, valued at close to $30.9 million in stock, and Larry Foley and Paul Farrell of Bronson Point Partners was right behind this move, as the fund sold off about $17.6 million worth. These transactions are interesting, as total hedge fund interest was cut by 1 funds last quarter.
What have insiders been doing with Live Nation Entertainment, Inc. (NYSE:LYV)?
Legal insider trading, particularly when it’s bullish, is best served when the company in focus has seen transactions within the past half-year. Over the last six-month time frame, Live Nation Entertainment, Inc. (NYSE:LYV) 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 Live Nation Entertainment, Inc. (NYSE:LYV). These stocks are Bona Film Group Ltd (ADR) (NASDAQ:BONA), World Wrestling Entertainment, Inc. (NYSE:WWE), The Madison Square Garden Co (NASDAQ:MSG), IMAX Corporation (USA) (NYSE:IMAX), and Starz (NASDAQ:STRZA). All of these stocks are in the entertainment – diversified industry and their market caps match LYV’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Bona Film Group Ltd (ADR) (NASDAQ:BONA)||5||0||0|
|World Wrestling Entertainment, Inc. (NYSE:WWE)||9||0||0|
|The Madison Square Garden Co (NASDAQ:MSG)||35||0||0|
|IMAX Corporation (USA) (NYSE:IMAX)||18||0||0|
Using the results shown by the previously mentioned tactics, average investors must always watch hedge fund and insider trading activity, and Live Nation Entertainment, Inc. (NYSE:LYV) is an important part of this process.