The shares of Grupo Televisa SAB (ADR) (NYSE:TV) are down 6.18%, as the media company has once again fallen short of the market’s expectations. The entertainment company has reported net sales of $1.33 billion for the second quarter of 2015 with net income of $82 million. The Mexican firm announced 8.5% year-over-year growth in its net sales, whereas its net income declined by 40% during the second quarter. One of the primary reasons for the poor quarterly results was the decline of 16.4% in the advertising revenue of Grupo Televisa. It is important to consider that the media company has fallen short of the market’s earnings expectations in each of the last four quarters. The shares of Grupo Televisa SAB (ADR) (NYSE:TV) are up by 15.92% year-to-date nonetheless, indicating a substantial optimism despite continual underperformance.
It appears the smart money wasn’t as convinced as other investors in the prospects of the company, as they were somewhat bearish on the stock of the entertainment company during the first quarter of the year. At the end of the first quarter, 25 hedge fund managers held $2.24 billion of the company’s shares, down from $2.30 billion in shares that 27 investors we track held at the end of 2014. Nonetheless, it appears the market optimism outshone hedge funds’ apathy, as shares soared in the second quarter despite another earnings miss being announced during that period.
We don’t just track the latest moves and sentiment among hedge funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testing in August 2012, the strategy worked brilliantly, outperforming the market every year and returning 135%, which is more than 80 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
The insiders at Grupo Televisa SAB (ADR) (NYSE:TV) have remained inactive for the past six months with no insider transactions. Insider activity is a powerful indicator of the latest sentiment among the top executives of a company.
With all of this in mind, let’s take a peek at the key action regarding Grupo Televisa SAB (ADR) (NYSE:TV).
What does the smart money think about Grupo Televisa SAB (ADR) (NYSE:TV)?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish in this stock, a reduction of 7% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings substantially.
Jean-Marie Eveillard‘s First Eagle Investment Management was the largest stockholder of the company in our database with 32.38 million shares valued at $1.07 billion. Michael Larson‘s Bill & Melinda Gates Foundation Trust had the second-largest position in Grupo Televisa SAB (ADR) (NYSE:TV), worth close to $557.2 million, with 16.88 million shares, corresponding to 3% of its total 13F portfolio. Sitting at the number three spot is FPR Partners, managed by Bob Peck and Andy Raab, which held a $126.3 million position of 3.83 million shares; the fund has 3.3% of its 13F portfolio invested in the stock. Some other peers that are bullish encompass Ken Fisher’s Fisher Asset Management, Cliff Asness’ AQR Capital Management, and Howard Marks’ Oaktree Capital Management.
Due to the fact that Grupo Televisa SAB (ADR) (NYSE:TV) has witnessed a declination in interest from the smart money, it’s easy to see that there lies a certain “tier” of money managers who sold off their entire stakes heading into the second quarter. Interestingly, Bain Capital‘s Brookside Capital dropped the biggest position of the more than 700 funds monitored by Insider Monkey, totaling about $48.7 million in stock. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also dumped its position, about $16.2 million worth of stock. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by two funds heading into the next quarter.
This is the fourth continuous quarter in which the company has fallen short of the market’s earnings expectations, and considering the bearish hedge fund sentiment and overcooked appreciation of the company’s shares, we do not recommend buying at this time, even on the dip today.
Disclosure: None
