Wynn Resorts, Limited (NASDAQ:WYNN) was in 33 hedge funds’ portfolio at the end of the fourth quarter of 2012. WYNN investors should pay attention to a decrease in hedge fund sentiment of late, as stagnancy is typically viewed as bearish in our experience. There were 33 hedge funds in our database with WYNN positions at the end of the previous quarter.
If you’d ask most shareholders, hedge funds are assumed to be worthless, old investment tools of years past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the top tier of this club, about 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total asset base, and by tracking their highest performing investments, we have uncovered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as integral, optimistic insider trading sentiment is another way to parse down the financial markets. There are a number of motivations for an insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this strategy if shareholders know where to look (learn more here).
With all of this in mind, we’re going to take a look at the recent action encompassing Wynn Resorts, Limited (NASDAQ:WYNN).
What have hedge funds been doing with Wynn Resorts, Limited (NASDAQ:WYNN)?
At year’s end, a total of 33 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Christopher Lord’s Criterion Capital had the largest position in Wynn Resorts, Limited (NASDAQ:WYNN), worth close to $84.1 million, accounting for 4.5% of its total 13F portfolio. On Criterion Capital’s heels is Alkeon Capital Management, managed by Panayotis æTakisÆ Sparaggis, which held a $34.9 million position; 1% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Ken Griffin’s Citadel Investment Group, Murray Stahl’s Horizon Asset Management and Steven Cohen’s SAC Capital Advisors.
Seeing as Wynn Resorts, Limited (NASDAQ:WYNN) has witnessed a declination in interest from the smart money, it’s easy to see that there was a specific group of fund managers who were dropping their full holdings heading into 2013. At the top of the heap, John Burbank’s Passport Capital cut the largest investment of all the hedgies we watch, comprising close to $55.1 million in stock., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund dropped about $40.4 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Wynn Resorts, Limited (NASDAQ:WYNN)?
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the last six-month time period, Wynn Resorts, Limited (NASDAQ:WYNN) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Wynn Resorts, Limited (NASDAQ:WYNN). These stocks are Penn National Gaming, Inc (NASDAQ:PENN), Carnival Corporation (NYSE:CCL), MGM Resorts International (NYSE:MGM), Royal Caribbean Cruises Ltd. (NYSE:RCL), and Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL). All of these stocks are in the resorts & casinos industry and their market caps resemble WYNN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Penn National Gaming, Inc (NASDAQ:PENN)||28||3||7|
|Carnival Corporation (NYSE:CCL)||26||0||9|
|MGM Resorts International (NYSE:MGM)||29||0||0|
|Royal Caribbean Cruises Ltd. (NYSE:RCL)||23||0||11|
|Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL)||37||0||0|
With the returns exhibited by our tactics, everyday investors should always monitor hedge fund and insider trading sentiment, and Wynn Resorts, Limited (NASDAQ:WYNN) applies perfectly to this mantra.