Here is What Hedge Funds Think About Cumulus Media Inc (CMLS)

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Cumulus Media Inc (NASDAQ:CMLS) to find out whether it was one of their high conviction long-term ideas.

Cumulus Media Inc (NASDAQ:CMLS) investors should be aware of a decrease in hedge fund sentiment in recent months. CMLS was in 21 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with CMLS holdings at the end of the previous quarter. At the end of this article we will also compare CMLS to other stocks including Assembly Biosciences Inc (NASDAQ:ASMB), Allot Communications Ltd. (NASDAQ:ALLT), and Emerge Energy Services LP (NYSE:EMES) to get a better sense of its popularity.

In the eyes of most market participants, hedge funds are assumed to be unimportant, old financial vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, Our experts choose to focus on the bigwigs of this group, around 700 funds. Most estimates calculate that this group of people command bulk of all hedge funds’ total capital, and by tracking their highest performing stock picks, Insider Monkey has figured out numerous investment strategies that have historically exceeded Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in their back tests.

With all of this in mind, we’re going to check out the latest action regarding Cumulus Media Inc (NASDAQ:CMLS).

How have hedgies been trading Cumulus Media Inc (NASDAQ:CMLS)?

Heading into Q4, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Geoffrey Raynor’s Q Investments (Specter Holdings) has the biggest position in Cumulus Media Inc (NASDAQ:CMLS), worth close to $5.4 million, accounting for 3.3% of its total 13F portfolio. Coming in second is Highland Capital Management, managed by James Dondero, which holds a $4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism comprise Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors, Gordy Holterman and Derek Dunn’s Overland Advisors and Wallace Weitz’s Wallace R. Weitz & Co..

Due to the fact that Cumulus Media Inc (NASDAQ:CMLS) has experienced a declination in interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedge funds that elected to cut their full holdings by the end of the third quarter. Interestingly, Tom Sandell’s Sandell Asset Management said goodbye to the biggest stake of the 700 funds tracked by Insider Monkey, valued at close to $5.7 million in stock, and Buckley Ratchford’s Wingspan Investment Management was right behind this move, as the fund cut about $0.7 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Cumulus Media Inc (NASDAQ:CMLS). These stocks are Assembly Biosciences Inc (NASDAQ:ASMB), Allot Communications Ltd. (NASDAQ:ALLT), Emerge Energy Services LP (NYSE:EMES), and Orion Marine Group, Inc. (NYSE:ORN). All of these stocks’ market caps are closest to CMLS’s market cap.

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $27 million in CMLS’s case. Assembly Biosciences Inc (NASDAQ:ASMB) is the most popular stock in this table. On the other hand Emerge Energy Services LP (NYSE:EMES) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Cumulus Media Inc (NASDAQ:CMLS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail despite the total number of funds long the stock dropping by 2.