Hedge Funds Are Selling The McClatchy Company (MNI)

Is The McClatchy Company (NYSE:MNI) a buy right now? Money managers are selling. The number of bullish hedge fund positions were cut by 1 lately.

If you’d ask most stock holders, hedge funds are assumed to be underperforming, old investment vehicles of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the bigwigs of this group, around 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total capital, and by paying attention to their highest performing equity investments, we have spotted a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Equally as important, optimistic insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are a number of reasons for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).

Now, we’re going to take a look at the key action regarding The McClatchy Company (NYSE:MNI).

Hedge fund activity in The McClatchy Company (NYSE:MNI)

Heading into 2013, a total of 11 of the hedge funds we track were long in this stock, a change of -8% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital had the largest position in The McClatchy Company (NYSE:MNI), worth close to $17.7 million, comprising 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $7.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish include Eric Semler’s TCS Capital Management, Boaz Weinstein’s Saba Capital and D. E. Shaw’s D E Shaw.

Due to the fact that The McClatchy Company (NYSE:MNI) has experienced a declination in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of money managers who sold off their positions entirely in Q4. Intriguingly, Thomas E. Claugus’s GMT Capital dumped the biggest position of the “upper crust” of funds we watch, totaling about $0.9 million in stock., and Leon Cooperman of Omega Advisors was right behind this move, as the fund cut about $0.9 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds in Q4.

What do corporate executives and insiders think about The McClatchy Company (NYSE:MNI)?

Insider buying is at its handiest when the company in focus has seen transactions within the past six months. Over the latest 180-day time period, The McClatchy Company (NYSE:MNI) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to The McClatchy Company (NYSE:MNI). These stocks are The E.W. Scripps Company (NYSE:SSP), A. H. Belo Corporation (NYSE:AHC), Media General, Inc. (NYSE:MEG), and Journal Communications, Inc. (NYSE:JRN). This group of stocks are in the publishing – newspapers industry and their market caps resemble MNI’s market cap.