At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not IMAX Corporation (NYSE:IMAX) makes for a good investment right now.
IMAX Corporation (NYSE:IMAX) shareholders have witnessed an increase in hedge fund interest in recent months. IMAX Corporation (NYSE:IMAX) was in 22 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 21. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMAX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a glance at the key hedge fund action regarding IMAX Corporation (NYSE:IMAX).
Do Hedge Funds Think IMAX Is A Good Stock To Buy Now?
At the end of March, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in IMAX a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the most valuable position in IMAX Corporation (NYSE:IMAX). Renaissance Technologies has a $40.8 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, which holds a $29.2 million position; 0.9% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism comprise Gregg J. Powers’s Private Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Chuck Royce’s Royce & Associates. In terms of the portfolio weights assigned to each position Private Capital Management allocated the biggest weight to IMAX Corporation (NYSE:IMAX), around 3.5% of its 13F portfolio. Diametric Capital is also relatively very bullish on the stock, earmarking 1.82 percent of its 13F equity portfolio to IMAX.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the most valuable position in IMAX Corporation (NYSE:IMAX). Two Sigma Advisors had $16.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $14.3 million investment in the stock during the quarter. The following funds were also among the new IMAX investors: William Harnisch’s Peconic Partners LLC, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Nick Thakore’s Diametric Capital.
Let’s also examine hedge fund activity in other stocks similar to IMAX Corporation (NYSE:IMAX). These stocks are Kforce Inc. (NASDAQ:KFRC), Standex International Corp. (NYSE:SXI), XL Group plc (NYSE:XL), Costamare Inc (NYSE:CMRE), BioLife Solutions, Inc. (NASDAQ:BLFS), Dril-Quip, Inc. (NYSE:DRQ), and Brookline Bancorp, Inc. (NASDAQ:BRKL). This group of stocks’ market valuations are similar to IMAX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KFRC | 13 | 41766 | -3 |
| SXI | 7 | 30113 | -3 |
| XL | 12 | 55720 | -6 |
| CMRE | 12 | 42706 | 1 |
| BLFS | 12 | 321570 | -2 |
| DRQ | 10 | 66664 | -2 |
| BRKL | 9 | 47101 | 0 |
| Average | 10.7 | 86520 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.7 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $194 million in IMAX’s case. Kforce Inc. (NASDAQ:KFRC) is the most popular stock in this table. On the other hand Standex International Corp. (NYSE:SXI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks IMAX Corporation (NYSE:IMAX) is more popular among hedge funds. Our overall hedge fund sentiment score for IMAX is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately IMAX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IMAX were disappointed as the stock returned -16.5% since the end of the first quarter (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
