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After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Six Flags Entertainment Corp (NYSE:SIX).
Six Flags Entertainment Corp (NYSE:SIX) investors should be aware of a decrease in support from the world’s most elite money managers recently. Six Flags Entertainment Corp (NYSE:SIX) was in 36 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 41. Our calculations also showed that SIX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
To the average investor there are plenty of metrics investors employ to assess their stock investments. A pair of the most underrated metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top money managers can trounce the broader indices by a very impressive margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV 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. Keeping this in mind we’re going to go over the recent hedge fund action regarding Six Flags Entertainment Corp (NYSE:SIX).
Do Hedge Funds Think SIX Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in SIX over the last 24 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, H Partners Management held the most valuable stake in Six Flags Entertainment Corp (NYSE:SIX), which was worth $337.6 million at the end of the second quarter. On the second spot was Jericho Capital Asset Management which amassed $104.7 million worth of shares. Citadel Investment Group, Arrowstreet Capital, and Thunderbird Partners 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 H Partners Management allocated the biggest weight to Six Flags Entertainment Corp (NYSE:SIX), around 29.26% of its 13F portfolio. Altai Capital is also relatively very bullish on the stock, dishing out 24.27 percent of its 13F equity portfolio to SIX.
Judging by the fact that Six Flags Entertainment Corp (NYSE:SIX) has faced falling interest from the smart money, we can see that there is a sect of hedge funds that slashed their positions entirely in the second quarter. At the top of the heap, Edmond M. Safra’s EMS Capital sold off the biggest stake of the “upper crust” of funds watched by Insider Monkey, valued at close to $68.2 million in stock, and Gaurav Kapadia’s XN Exponent Advisors was right behind this move, as the fund sold off about $61.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Six Flags Entertainment Corp (NYSE:SIX) but similarly valued. These stocks are First Hawaiian, Inc. (NASDAQ:FHB), Allogene Therapeutics, Inc. (NASDAQ:ALLO), Sana Biotechnology, Inc. (NASDAQ:SANA), Covetrus, Inc. (NASDAQ:CVET), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), Equitrans Midstream Corporation (NYSE:ETRN), and Broadstone Net Lease, Inc. (NYSE:BNL). This group of stocks’ market values are similar to SIX’s market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FHB,10,144615,-9 ALLO,26,240779,7 SANA,10,76873,-5 CVET,18,144353,1 SFBS,10,10152,1 ETRN,27,289754,-1 BNL,12,40345,3 Average,16.1,135267,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $895 million in SIX’s case. Equitrans Midstream Corporation (NYSE:ETRN) is the most popular stock in this table. On the other hand First Hawaiian, Inc. (NASDAQ:FHB) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Six Flags Entertainment Corp (NYSE:SIX) is more popular among hedge funds. Our overall hedge fund sentiment score for SIX is 80.3. 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. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Unfortunately SIX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SIX were disappointed as the stock returned 0.5% since the end of the second quarter (through 10/11) 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 since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
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