Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of News Corp (NASDAQ:NWSA) based on that data and determine whether they were really smart about the stock.
Is News Corp (NASDAQ:NWSA) ready to rally soon? Investors who are in the know were getting less bullish. The number of bullish hedge fund bets were cut by 3 in recent months. News Corp (NASDAQ:NWSA) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 37. Our calculations also showed that NWSA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s take a gander at the recent hedge fund action regarding News Corp (NASDAQ:NWSA).
Donald Yacktman of Yacktman Asset Management
Do Hedge Funds Think NWSA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in NWSA a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in News Corp (NASDAQ:NWSA) was held by Yacktman Asset Management, which reported holding $377.2 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $65.3 million position. Other investors bullish on the company included D E Shaw, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position 59 North Capital allocated the biggest weight to News Corp (NASDAQ:NWSA), around 7% of its 13F portfolio. Blue Grotto Capital is also relatively very bullish on the stock, dishing out 6.55 percent of its 13F equity portfolio to NWSA.
Because News Corp (NASDAQ:NWSA) has witnessed falling interest from the smart money, it’s safe to say that there were a few hedgies that slashed their positions entirely last quarter. At the top of the heap, Scott Ferguson’s Sachem Head Capital said goodbye to the biggest investment of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $34.8 million in call options. Alexander Mitchell’s fund, Scopus Asset Management, also said goodbye to its call options, about $7.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as News Corp (NASDAQ:NWSA) but similarly valued. These stocks are Loews Corporation (NYSE:L), Solaredge Technologies Inc (NASDAQ:SEDG), Nordson Corporation (NASDAQ:NDSN), W.P. Carey Inc. (NYSE:WPC), Lightspeed Commerce Inc. (NYSE:LSPD), Masco Corporation (NYSE:MAS), and News Corp (NASDAQ:NWS). All of these stocks’ market caps resemble NWSA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| L | 27 | 175121 | -1 |
| SEDG | 33 | 594467 | -4 |
| NDSN | 29 | 310857 | -5 |
| WPC | 24 | 142763 | -5 |
| LSPD | 26 | 631903 | -3 |
| MAS | 29 | 528895 | -6 |
| NWS | 13 | 130888 | -6 |
| Average | 25.9 | 359271 | -4.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $359 million. That figure was $738 million in NWSA’s case. Solaredge Technologies Inc (NASDAQ:SEDG) is the most popular stock in this table. On the other hand News Corp (NASDAQ:NWS) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks News Corp (NASDAQ:NWSA) is more popular among hedge funds. Our overall hedge fund sentiment score for NWSA is 79.6. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, NWSA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NWSA were disappointed as the stock returned -5.5% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
