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Is Netflix, Inc. (NFLX) Going to Burn These Hedge Funds?

As industrywide interest jumped, key hedge funds were breaking ground themselves. Viking Global, managed by Andreas Halvorsen, assembled the most valuable position in Netflix, Inc. (NASDAQ:NFLX). The fund reportedly had $466.4 million invested in the company at the end of the quarter. Robert Pitts’s Steadfast Capital Management also initiated a $52.7 million position during the quarter. The other funds with brand new NFLX positions are Jim Simons’s Renaissance Technologies, Pasco Alfaro / Richard Tumure’s Miura Global Management, and George Soros’s Soros Fund Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Netflix, Inc. (NASDAQ:NFLX) but similarly valued. We will take a look at E I Du Pont De Nemours And Co (NYSE:DD), The Bank of New York Mellon Corporation (NYSE:BK), McKesson Corporation (NYSE:MCK), and Carnival plc (ADR) (NYSE:CUK). This group of stocks’ market caps resemble NFLX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DD 41 2844709 -5
BK 49 5803948 -13
MCK 68 3316354 6
CUK 8 37415 2

As you can see these stocks had an average of 42 hedge funds with bullish positions and the average amount invested in these stocks was a little over $3 billion. That figure was $6.51 million in NFLX’s case. McKesson Corporation (NYSE:MCK) is the most popular stock in this table, while Carnival plc (ADR) (NYSE:CUK) is at the other end of the specter with only 8 bullish hedge fund positions. Netflix, Inc. (NASDAQ:NFLX) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MCK might be a better candidate to consider a long position.

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