Is Central European Media Enterprises Ltd. (CETV) A Good Stock To Buy?
Abigail Fisher
The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Central European Media Enterprises Ltd. (NASDAQ:CETV).
Central European Media Enterprises Ltd. (NASDAQ:CETV) was in 8 hedge funds' portfolios at the end of the second quarter of 2019. CETV investors should be aware of an increase in activity from the world's largest hedge funds of late. There were 7 hedge funds in our database with CETV positions at the end of the previous quarter. Our calculations also showed that CETV isn't among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
CETV_oct2019
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a gander at the latest hedge fund action encompassing Central European Media Enterprises Ltd. (NASDAQ:CETV).
How have hedgies been trading Central European Media Enterprises Ltd. (NASDAQ:CETV)?
At the end of the second quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CETV over the last 16 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
TUDOR INVESTMENT CORP
More specifically, D E Shaw was the largest shareholder of Central European Media Enterprises Ltd. (NASDAQ:CETV), with a stake worth $3 million reported as of the end of March. Trailing D E Shaw was Marshall Wace LLP, which amassed a stake valued at $2.5 million. Tudor Investment Corp, Renaissance Technologies, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, key money managers have been driving this bullishness. Renaissance Technologies, assembled the biggest position in Central European Media Enterprises Ltd. (NASDAQ:CETV). Renaissance Technologies had $0.9 million invested in the company at the end of the quarter. Roger Ibbotson's Zebra Capital Management also initiated a $0.6 million position during the quarter. The other funds with new positions in the stock are Israel Englander's Millennium Management and Michael Gelband's ExodusPoint Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Central European Media Enterprises Ltd. (NASDAQ:CETV) but similarly valued. We will take a look at Loral Space & Communications Inc. (NASDAQ:LORL), KEMET Corporation (NYSE:KEM), Meta Financial Group Inc. (NASDAQ:CASH), and Office Depot Inc (NASDAQ:ODP). All of these stocks' market caps are similar to CETV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LORL,16,513824,-3 KEM,18,146880,-1 CASH,12,123017,0 ODP,20,62932,-2 Average,16.5,211663,-1.5 [/table]
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $212 million. That figure was $10 million in CETV's case. Office Depot Inc (NASDAQ:ODP) is the most popular stock in this table. On the other hand Meta Financial Group Inc. (NASDAQ:CASH) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Central European Media Enterprises Ltd. (NASDAQ:CETV) is even less popular than CASH. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on CETV, though not to the same extent, as the stock returned 3.2% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
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