Hedge Funds Are Crazy About News Corp (NWSA)

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of News Corp (NASDAQ:NWSA) based on that data.

Is News Corp (NASDAQ:NWSA) ready to rally soon? Hedge funds were buying. The number of bullish hedge fund positions improved by 2 in recent months. News Corp (NASDAQ:NWSA) was in 37 hedge funds’ portfolios at the end of June. The all time high for this statistic is 35. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NWSA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Sahm Adrangi of Kerrisdale 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. With all of this in mind let’s go over the fresh hedge fund action surrounding News Corp (NASDAQ:NWSA).

Do Hedge Funds Think NWSA Is A Good Stock To Buy Now?

At Q2’s end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 24 hedge funds with a bullish position in NWSA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Yacktman Asset Management held the most valuable stake in News Corp (NASDAQ:NWSA), which was worth $415.7 million at the end of the second quarter. On the second spot was Arrowstreet Capital which amassed $195.7 million worth of shares. Citadel Investment Group, Scopus Asset Management, and Sachem Head Capital 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 59 North Capital allocated the biggest weight to News Corp (NASDAQ:NWSA), around 9.61% of its 13F portfolio. Blue Grotto Capital is also relatively very bullish on the stock, earmarking 5.11 percent of its 13F equity portfolio to NWSA.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Kettle Hill Capital Management, managed by Andrew Kurita, established the largest position in News Corp (NASDAQ:NWSA). Kettle Hill Capital Management had $22.1 million invested in the company at the end of the quarter. Sahm Adrangi’s Kerrisdale Capital also initiated a $14.4 million position during the quarter. The following funds were also among the new NWSA investors: Alexander Mitchell’s Scopus Asset Management, Ray Dalio’s Bridgewater Associates, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as News Corp (NASDAQ:NWSA) but similarly valued. These stocks are James Hardie Industries plc (NYSE:JHX), GameStop Corp. (NYSE:GME), Lumen Technologies, Inc. (NYSE:LUMN), Brown & Brown, Inc. (NYSE:BRO), Masco Corporation (NYSE:MAS), LKQ Corporation (NASDAQ:LKQ), and Cognex Corporation (NASDAQ:CGNX). This group of stocks’ market values are similar to NWSA’s market value.

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As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $751 million. That figure was $1088 million in NWSA’s case. Masco Corporation (NYSE:MAS) is the most popular stock in this table. On the other hand James Hardie Industries plc (NYSE:JHX) is the least popular one with only 4 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 87. 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 NWSA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NWSA were disappointed as the stock returned -6.6% 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.