Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Cinedigm Corp (NASDAQ:CIDM).
Is CIDM stock a buy? Cinedigm Corp (NASDAQ:CIDM) investors should pay attention to an increase in activity from the world's largest hedge funds in recent months. Cinedigm Corp (NASDAQ:CIDM) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 8. There were 2 hedge funds in our database with CIDM positions at the end of the fourth quarter. Our calculations also showed that CIDM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let's take a gander at the latest hedge fund action regarding Cinedigm Corp (NASDAQ:CIDM).
Do Hedge Funds Think CIDM Is A Good Stock To Buy Now?
At first quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 150% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CIDM over the last 23 quarters. 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 holdings meaningfully (or already accumulated large positions).
Is CIDM A Good Stock To Buy?
More specifically, Citadel Investment Group was the largest shareholder of Cinedigm Corp (NASDAQ:CIDM), with a stake worth $0.4 million reported as of the end of March. Trailing Citadel Investment Group was Millennium Management, which amassed a stake valued at $0.2 million. LMR Partners, Engineers Gate Manager, and Schonfeld Strategic Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Engineers Gate Manager allocated the biggest weight to Cinedigm Corp (NASDAQ:CIDM), around 0.0024% of its 13F portfolio. LMR Partners is also relatively very bullish on the stock, earmarking 0.0016 percent of its 13F equity portfolio to CIDM.
As aggregate interest increased, specific money managers have jumped into Cinedigm Corp (NASDAQ:CIDM) headfirst. Millennium Management, managed by Israel Englander, initiated the biggest position in Cinedigm Corp (NASDAQ:CIDM). Millennium Management had $0.2 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners also made a $0.1 million investment in the stock during the quarter. The following funds were also among the new CIDM investors: Greg Eisner's Engineers Gate Manager and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Cinedigm Corp (NASDAQ:CIDM) but similarly valued. These stocks are comScore, Inc. (NASDAQ:SCOR), Horizon Technology Finance Corp (NASDAQ:HRZN), Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH), Kamada Ltd (NASDAQ:KMDA), EZCORP Inc (NASDAQ:EZPW), NextCure, Inc. (NASDAQ:NXTC), and Invacare Corporation (NYSE:IVC). This group of stocks' market caps are closest to CIDM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SCOR,15,51605,1 HRZN,1,2446,-1 LBPH,10,64900,10 KMDA,4,12987,-1 EZPW,13,47346,-2 NXTC,14,58180,0 IVC,17,92891,1 Average,10.6,47194,1.1 [/table]
As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $1 million in CIDM's case. Invacare Corporation (NYSE:IVC) is the most popular stock in this table. On the other hand Horizon Technology Finance Corp (NASDAQ:HRZN) is the least popular one with only 1 bullish hedge fund positions. Cinedigm Corp (NASDAQ:CIDM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CIDM is 39.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately CIDM wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CIDM investors were disappointed as the stock returned -17.4% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
