Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to King Digital Entertainment PLC (NYSE:KING) changed recently.
Is King Digital Entertainment PLC a buy here? Prominent investors are becoming less confident. The number of bullish hedge fund positions were trimmed by 6 lately. KING was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 24 hedge funds in our database with KING positions at the end of the previous quarter. At the end of this article we will also compare KING to other stocks including Orbital ATK Inc (NYSE:OA), ICON plc – Ordinary Shares (NASDAQ:ICLR), and Core Laboratories N.V. (NYSE:CLB) to get a better sense of its popularity.
Keeping this in mind, we’re going to view the new action encompassing King Digital Entertainment PLC (NYSE:KING).
How are hedge funds trading King Digital Entertainment PLC (NYSE:KING)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Pitts’s Steadfast Capital Management has the most valuable position in King Digital Entertainment PLC (NYSE:KING), worth close to $132.1 million, accounting for 2.6% of its total 13F portfolio. Sitting at the No. 2 spot is Alyeska Investment Group, led by Anand Parekh, holding a $49.9 million position; 0.6% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions consist of Philippe Laffont’s Coatue Management, D E Shaw and Patrik Brummer’s Zenit Asset Management AB.