In the meantime, numerous news outlets have recently discussed possible activist campaigns against Time Warner Inc (NYSE:TWX), which may force the media giant to put itself for sale or spin-off of its HBO business. Reportedly, activist hedge fund Corvex Management, managed by Keith Meister, was planning on forcing Time Warner to makes some value-creating moves. Additionally, activist investor Nelson Peltz‘s Trian Fund Management is allegedly another player who could put pressure on the media and entertainment company. It is believed that the market does not properly value Time Warner Inc (NYSE:TWX)’s underlying assets, so activist pressure might unlock some trapped shareholder value. Last but not least, the shares of Time Warner are currently trading 11.35-times expected earnings, below the forward P/E multiple of 13.80 for the Movies and Entertainment industry. Competitors Walt Disney Co (NYSE:DIS) and Twenty-First Century Fox Inc. (NASDAQ:FOXA) have forward P/E ratios of 15.77 and 12.88, respectively.
What does the smart money think about Time Warner Inc (NYSE:TWX)?
Heading into 2016, a total of 72 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 4% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Greenlight Capital, managed by David Einhorn, holds the most valuable position in Time Warner Inc (NYSE:TWX). Greenlight Capital has a $416.5 million position in the stock, comprising 7.6% of its 13F portfolio. The second most bullish fund manager is D.E. Shaw & Co. L.P. of David E. Shaw, with a $368.7 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other peers that hold long positions contain John Brennan’s Sirios Capital Management, Philippe Laffont’s Coatue Management and Keith Meister’s Corvex Capital.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Folger Hill Asset Management, managed by Solomon Kumin, established the most valuable position in Time Warner Inc (NYSE:TWX). Folger Hill Asset Management had $52 million invested in the company at the end of the quarter. Howard Guberman’s Gruss Asset Management also initiated a $51.7 million position during the quarter. The other funds with brand new TWX positions are Malcolm Fairbairn’s Ascend Capital, Steve Cohen’s Point72 Asset Management, and Larry Petrella and Michael Siminerio’s PineView Asset Management.
The third page of this article discusses the hedge fund activity in several other companies that have market values similar to the one of Time Warner.
