Is It Time to Buy Back Into Activision Blizzard, Inc. (ATVI)?

Judging by the fact that Activision Blizzard, Inc. (NASDAQ:ATVI) has faced a decline in interest from hedge fund managers, logic holds that there was a specific group of funds who sold off their full holdings last quarter. Interestingly, Josh Resnick’s Jericho Capital Asset Management cut the largest investment of all the hedgies tracked by Insider Monkey, worth close to $222.8 million in stock, and Dan Loeb’s Third Point was right behind this move, as the fund said goodbye to about $118.9 million worth of shares. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Activision Blizzard, Inc. (NASDAQ:ATVI) but similarly valued. We will take a look at Aon PLC (NYSE:AON), Johnson Controls, Inc. (NYSE:JCI), SYSCO Corporation (NYSE:SYY), and Kellogg Company (NYSE:K). This group of stocks’ market caps are closest to ATVI’s market cap.

As you can see these stocks had an average of 39.5 hedge funds with bullish positions and the average amount invested in these stocks was $2.57 billion. That figure was $4.24 billion in ATVI’s case. Johnson Controls, Inc. (NYSE:JCI) is the most popular stock in this table. On the other hand Aon PLC (NYSE:AON) is the least popular one with only 31 bullish hedge fund positions. Compared to these stocks Activision Blizzard, Inc. (NASDAQ:ATVI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and have more money invested in it, it may be a good idea to analyze it in detail and potentially include it in your portfolio on the current dip, as even given the decline in hedge fund sentiment in Q3, we think the stock’s correction makes for an attractive entry point and suspect other hedge funds may also buy back in on the weakness.

Disclosure: None