The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Gannett Co Inc (NYSE:GCI) from the perspective of those successful funds.
Is Gannett Co Inc (NYSE:GCI) an excellent investment today? Investors who are in the know are taking an optimistic view. The number of long hedge fund bets that are revealed through the 13F filings experienced an increase of 2 recently. There were 16 hedge funds in our database with GCI holdings at the end of the previous quarter. At the end of this article we will also compare GCI to other stocks including Shutterfly, Inc. (NASDAQ:SFLY), OM Asset Management PLC (NYSE:OMAM), and Sothebys (NYSE:BID) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What have hedge funds been doing with Gannett Co Inc (NYSE:GCI)?
Heading into the fourth quarter of 2016, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 13% from one quarter earlier, soaring to a yearly high. Below, you can check out the change in hedge fund sentiment towards GCI over the last 5 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 holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Cliff Asness’ AQR Capital Management holds the most valuable position in Gannett Co Inc (NYSE:GCI) which has a $13.9 million position in the stock. Sitting at the No. 2 spot is Anthony Scaramucciá’s Skybridge Capital holding a $10.5 million position; 2.4% of its 13F portfolio is allocated to the company. Remaining peers that are bullish comprise Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management, and John W. Rogers’ Ariel Investments. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, key money managers were breaking ground themselves. Paul Marshall and Ian Wace’s Marshall Wace LLP assembled the most outsized position in Gannett Co Inc (NYSE:GCI). Marshall Wace LLP had $3.5 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also initiated a $1 million position during the quarter. The other funds with brand new GCI positions are Dennis Leibowitz’s Act II Capital, George Hall’s Clinton Group, and David Harding’s Winton Capital Management.
Let’s check out hedge fund activity in other stocks similar to Gannett Co., Inc. (NYSE:GCI). These stocks are Shutterfly, Inc. (NASDAQ:SFLY), OM Asset Management PLC (NYSE:OMAM), Sothebys (NYSE:BID), and Shutterstock Inc (NYSE:SSTK). This group of stocks’ market caps match GCI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SFLY | 23 | 460368 | 1 |
| OMAM | 12 | 63974 | 1 |
| BID | 20 | 559010 | 4 |
| SSTK | 9 | 36834 | 2 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $280 million. That figure was $66 million in GCI’s case. Shutterfly, Inc. (NASDAQ:SFLY) is the most popular stock in this table. On the other hand Shutterstock Inc (NYSE:SSTK) is the least popular one with only 9 bullish hedge fund positions. Gannett Co Inc (NYSE:GCI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SFLY might be a better candidate to consider taking a long position in.
Disclosure: None
