We can judge whether IMAX Corporation (USA) (NYSE:IMAX) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Is IMAX Corporation (USA) (NYSE:IMAX) the right pick for your portfolio? The best stock pickers are becoming less confident. The number of bullish hedge fund bets decreased by 1 lately. IMAX was in 20 hedge funds’ portfolios at the end of the third quarter of 2015. There were 21 hedge funds in our database with IMAX holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Franks International NV (NYSE:FI), NuVasive, Inc. (NASDAQ:NUVA), and HRG Group Inc (NYSE:HRG) to gather more data points.
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Now, let’s review the recent action surrounding IMAX Corporation (USA) (NYSE:IMAX).
What have hedge funds been doing with IMAX Corporation (USA) (NYSE:IMAX)?
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Charles Clough’s Clough Capital Partners has the most valuable position in IMAX Corporation (USA) (NYSE:IMAX), worth close to $45.8 million, comprising 2% of its total 13F portfolio. The second most bullish fund manager is IBIS Capital Partners, managed by David Forster and Peter Wilton, which holds a $23 million position; the fund has 8.7% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include Columbus Circle Investors, Ken Grossman and Glen Schneider’s SG Capital Management and Ken Griffin’s Citadel Investment Group.
Since IMAX Corporation (USA) (NYSE:IMAX) has witnessed bearish sentiment from hedge fund managers, we can see that there were a few fund managers that elected to cut their entire stakes heading into Q4. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the biggest stake of all the hedgies followed by Insider Monkey, worth an estimated $13.1 million in stock. D E Shaw, also said goodbye to its stock, about $11.2 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as IMAX Corporation (USA) (NYSE:IMAX) but similarly valued. We will take a look at Franks International NV (NYSE:FI), NuVasive, Inc. (NASDAQ:NUVA), HRG Group Inc (NYSE:HRG), and Laclede Group Inc (NYSE:LG). 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 |
|---|---|---|---|
| FI | 12 | 35734 | -5 |
| NUVA | 37 | 622078 | 1 |
| HRG | 26 | 1667547 | 0 |
| LG | 8 | 84602 | -1 |
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $602 million. That figure was $136 million in IMAX’s case. NuVasive, Inc. (NASDAQ:NUVA) is the most popular stock in this table. On the other hand Laclede Group Inc (NYSE:LG) is the least popular one with only 8 bullish hedge fund positions. IMAX Corporation (USA) (NYSE:IMAX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NUVA might be a better candidate to consider a long position.
