The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Graham Holdings Co (NYSE:GHC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Graham Holdings Co (NYSE:GHC) has experienced an increase in support from the world’s most elite money managers lately. Graham Holdings Co (NYSE:GHC) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that GHC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Mason Hawkins of Southeastern Asset Management
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. Now let’s check out the recent hedge fund action regarding Graham Holdings Co (NYSE:GHC).
Do Hedge Funds Think GHC Is A Good Stock To Buy Now?
At the end of September, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards GHC over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Southeastern Asset Management held the most valuable stake in Graham Holdings Co (NYSE:GHC), which was worth $156.3 million at the end of the third quarter. On the second spot was Wallace Capital Management which amassed $102.4 million worth of shares. Madison Avenue Partners, AQR Capital Management, and Renaissance Technologies 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 Madison Avenue Partners allocated the biggest weight to Graham Holdings Co (NYSE:GHC), around 20.34% of its 13F portfolio. Wallace Capital Management is also relatively very bullish on the stock, setting aside 13.9 percent of its 13F equity portfolio to GHC.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most valuable position in Graham Holdings Co (NYSE:GHC). Millennium Management had $1.6 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Graham Holdings Co (NYSE:GHC) but similarly valued. We will take a look at Pebblebrook Hotel Trust (NYSE:PEB), Terex Corporation (NYSE:TEX), Ultrapar Participacoes SA (NYSE:UGP), Patterson Companies, Inc. (NASDAQ:PDCO), Verint Systems Inc. (NASDAQ:VRNT), Relay Therapeutics, Inc. (NASDAQ:RLAY), and Urban Outfitters, Inc. (NASDAQ:URBN). All of these stocks’ market caps are closest to GHC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PEB | 17 | 63913 | 0 |
| TEX | 25 | 358521 | -2 |
| UGP | 5 | 8393 | -5 |
| PDCO | 21 | 151269 | -2 |
| VRNT | 25 | 708338 | -5 |
| RLAY | 18 | 443758 | 1 |
| URBN | 23 | 275737 | -5 |
| Average | 19.1 | 287133 | -2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $287 million. That figure was $458 million in GHC’s case. Terex Corporation (NYSE:TEX) is the most popular stock in this table. On the other hand Ultrapar Participacoes SA (NYSE:UGP) is the least popular one with only 5 bullish hedge fund positions. Graham Holdings Co (NYSE:GHC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GHC is 79.2. 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 positive signal but 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately GHC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GHC were disappointed as the stock returned -0.4% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
