With the third-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 in or sell heading into the fourth quarter. One of these stocks was New Media Investment Group Inc (NYSE:NEWM).
Is New Media Investment Group Inc (NYSE:NEWM) a healthy stock for your portfolio? Investors who are in the know are selling. The number of bullish hedge fund bets retreated by 2 recently. New Media Investment Group Inc was in 22 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with New Media Investment Group Inc holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks, or vice versa, as we’ll see. That’s why at the end of this article we will examine companies such as Customers Bancorp Inc (NASDAQ:CUBI), HealthStream, Inc. (NASDAQ:HSTM), and IntelliPharmaCeutics International Inc. (TSE:I) to gather more data points.
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According to most stock holders, hedge funds are viewed as unimportant, outdated financial tools of yesteryear. While there are more than 8,000 funds in operation at the moment, our researchers look at the leaders of this group, approximately 700 funds. Most estimates calculate that this group of people command the majority of the smart money’s total asset base, and by tracking their inimitable equity investments, Insider Monkey has found a few investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s take a glance at the latest action surrounding New Media Investment Group Inc (NYSE:NEWM).
Hedge fund activity in New Media Investment Group Inc (NYSE:NEWM)
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a fall of 8% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Leon Cooperman’s Omega Advisors has the largest position in New Media Investment Group Inc (NYSE:NEWM), worth close to $59.7 million, corresponding to 1.2% of its total 13F portfolio. Coming in second is Trishield Capital Management, managed by Jeff Buick, which holds an $18.9 million position; 20.9% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions contain Chuck Royce’s Royce & Associates, George McCabe’s Portolan Capital Management, and Ken Griffin’s Citadel Investment Group.
Seeing as New Media Investment Group Inc (NYSE:NEWM) has faced a declination in interest from hedge fund managers, we can see that there is a sect of fund managers who sold off their positions entirely heading into Q4. It’s worth mentioning that Spencer M. Waxman’s Shannon River Fund Management sold off the biggest stake of the “upper crust” of funds followed by Insider Monkey, comprising close to $21.1 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dropped about $2.8 million worth of shares. These moves are important to note, as total hedge fund interest was cut by 2 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as New Media Investment Group Inc (NYSE:NEWM) but similarly valued. These stocks are Customers Bancorp Inc (NASDAQ:CUBI), HealthStream, Inc. (NASDAQ:HSTM), IntelliPharmaCeutics International Inc. (TSE:I), and Atrion Corporation (NASDAQ:ATRI). This group of stocks’ market valuations are closest to New Media Investment Group Inc’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CUBI | 9 | 34867 | 1 |
| HSTM | 15 | 32179 | 1 |
| I | 11 | 49121 | 0 |
| ATRI | 8 | 31883 | 1 |
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $112 million in New Media Investment Group Inc’s case. HealthStream, Inc. (NASDAQ:HSTM) is the most popular stock in this table. On the other hand Atrion Corporation (NASDAQ:ATRI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks New Media Investment Group Inc (NYSE:NEWM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and have far more money invested in it, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
