With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Entravision Communication Corporation (NYSE:EVC).
Entravision Communication Corporation (NYSE:EVC) has experienced a decrease in hedge fund interest recently. Our calculations also showed that EVC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s view the latest hedge fund action surrounding Entravision Communication Corporation (NYSE:EVC).
What have hedge funds been doing with Entravision Communication Corporation (NYSE:EVC)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -27% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards EVC over the last 17 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Entravision Communication Corporation (NYSE:EVC) was held by Angelo Gordon & Co, which reported holding $13.6 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $5.9 million position. Other investors bullish on the company included AQR Capital Management, D E Shaw, and Millennium Management. In terms of the portfolio weights assigned to each position Angelo Gordon & Co allocated the biggest weight to Entravision Communication Corporation (NYSE:EVC), around 1.74% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, setting aside 0.1 percent of its 13F equity portfolio to EVC.
Seeing as Entravision Communication Corporation (NYSE:EVC) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of fund managers that slashed their entire stakes heading into Q4. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace said goodbye to the biggest investment of all the hedgies followed by Insider Monkey, worth close to $0.7 million in stock. Frederick DiSanto’s fund, Ancora Advisors, also dropped its stock, about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 4 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Entravision Communication Corporation (NYSE:EVC) but similarly valued. We will take a look at MOGU Inc. (NYSE:MOGU), MutualFirst Financial, Inc. (NASDAQ:MFSF), Reliant Bancorp, Inc. (NASDAQ:RBNC), and Kindred Biosciences Inc (NASDAQ:KIN). All of these stocks’ market caps are similar to EVC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MOGU | 2 | 26364 | -1 |
| MFSF | 3 | 26953 | 0 |
| RBNC | 1 | 432 | 0 |
| KIN | 7 | 79753 | -2 |
| Average | 3.25 | 33376 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $30 million in EVC’s case. Kindred Biosciences Inc (NASDAQ:KIN) is the most popular stock in this table. On the other hand Reliant Bancorp, Inc. (NASDAQ:RBNC) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Entravision Communication Corporation (NYSE:EVC) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately EVC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on EVC were disappointed as the stock returned -10.7% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
