The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Six Flags Entertainment Corp (NYSE:SIX) based on those filings.
Is Six Flags Entertainment Corp (NYSE:SIX) going to take off soon? Hedge funds are becoming less hopeful. The number of long hedge fund bets were trimmed by 8 recently. Our calculations also showed that SIX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). SIX was in 30 hedge funds’ portfolios at the end of March. There were 38 hedge funds in our database with SIX holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a multitude of methods market participants put to use to appraise their stock investments. A pair of the most underrated methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outperform the broader indices by a healthy amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to review the recent hedge fund action encompassing Six Flags Entertainment Corp (NYSE:SIX).
Hedge fund activity in Six Flags Entertainment Corp (NYSE:SIX)
Heading into the second quarter of 2020, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -21% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in SIX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Six Flags Entertainment Corp (NYSE:SIX) was held by H Partners Management, which reported holding $97.8 million worth of stock at the end of September. It was followed by Impala Asset Management with a $32.8 million position. Other investors bullish on the company included Renaissance Technologies, Two Sigma Advisors, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position H Partners Management allocated the biggest weight to Six Flags Entertainment Corp (NYSE:SIX), around 37.69% of its 13F portfolio. Altai Capital is also relatively very bullish on the stock, dishing out 15.3 percent of its 13F equity portfolio to SIX.
Seeing as Six Flags Entertainment Corp (NYSE:SIX) has faced bearish sentiment from hedge fund managers, it’s easy to see that there were a few hedgies that slashed their entire stakes in the first quarter. At the top of the heap, Amy Minella’s Cardinal Capital dropped the biggest position of all the hedgies tracked by Insider Monkey, valued at close to $104.2 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund sold off about $38.1 million worth. These moves are important to note, as total hedge fund interest fell by 8 funds in the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Six Flags Entertainment Corp (NYSE:SIX) but similarly valued. These stocks are Asbury Automotive Group, Inc. (NYSE:ABG), Heron Therapeutics Inc (NASDAQ:HRTX), Marcus & Millichap Inc (NYSE:MMI), and Viper Energy Partners LP (NASDAQ:VNOM). All of these stocks’ market caps are similar to SIX’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $146 million. That figure was $240 million in SIX’s case. Asbury Automotive Group, Inc. (NYSE:ABG) is the most popular stock in this table. On the other hand Marcus & Millichap Inc (NYSE:MMI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Six Flags Entertainment Corp (NYSE:SIX) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on SIX as the stock returned 83.3% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.