Is Dreamworks Animation Skg Inc (NASDAQ:DWA) a buy here? Money managers are turning less bullish. The number of bullish hedge fund positions dropped by 2 recently.
If you’d ask most market participants, hedge funds are assumed to be worthless, old investment tools of years past. While there are over 8000 funds trading today, we look at the top tier of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total capital, and by watching their best equity investments, we have come up with a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as integral, positive insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are a number of incentives for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).
Keeping this in mind, let’s take a gander at the key action surrounding Dreamworks Animation Skg Inc (NASDAQ:DWA).
What have hedge funds been doing with Dreamworks Animation Skg Inc (NASDAQ:DWA)?
At year’s end, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Murray Stahl’s Horizon Asset Management had the biggest position in Dreamworks Animation Skg Inc (NASDAQ:DWA), worth close to $67.1 million, accounting for 2.1% of its total 13F portfolio. On Horizon Asset Management’s heels is SAC Capital Advisors, managed by Steven Cohen, which held a $20.7 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Chuck Royce’s Royce & Associates, Richard C. Patton’s Courage Capital and Paul Tudor Jones’s Tudor Investment Corp.
Since Dreamworks Animation Skg Inc (NASDAQ:DWA) has experienced falling interest from the aggregate hedge fund industry, we can see that there was a specific group of hedgies that slashed their entire stakes last quarter. At the top of the heap, Alexander Mitchell’s Scopus Asset Management dumped the biggest investment of all the hedgies we monitor, valued at close to $2.9 million in stock.. Charles Davidson’s fund, Wexford Capital, also sold off its call options., about $1.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.
What do corporate executives and insiders think about Dreamworks Animation Skg Inc (NASDAQ:DWA)?
Bullish insider trading is best served when the company in question has experienced transactions within the past 180 days. Over the latest six-month time period, Dreamworks Animation Skg Inc (NASDAQ:DWA) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Dreamworks Animation Skg Inc (NASDAQ:DWA). These stocks are Carmike Cinemas, Inc. (NASDAQ:CKEC), RealD (NYSE:RLD), Cinemark Holdings, Inc. (NYSE:CNK), Lions Gate Entertainment Corp. (USA) (NYSE:LGF), and Regal Entertainment Group (NYSE:RGC). All of these stocks are in the movie production, theaters industry and their market caps match DWA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Carmike Cinemas, Inc. (NASDAQ:CKEC) | 15 | 2 | 0 |
| RealD (NYSE:RLD) | 14 | 0 | 5 |
| Cinemark Holdings, Inc. (NYSE:CNK) | 19 | 0 | 5 |
| Lions Gate Entertainment Corp. (USA) (NYSE:LGF) | 15 | 0 | 0 |
| Regal Entertainment Group (NYSE:RGC) | 16 | 0 | 0 |
With the results demonstrated by the aforementioned time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Dreamworks Animation Skg Inc (NASDAQ:DWA) shareholders fit into this picture quite nicely.
