You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros and Seth Klarman hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is News Corp (NASDAQ:NWS) a buy right now? Prominent investors are becoming less confident. The number of long hedge fund positions retreated by 3 recently. Our calculations also showed that nws isn’t among the 30 most popular stocks among hedge funds. NWS was in 10 hedge funds’ portfolios at the end of the first quarter of 2019. There were 13 hedge funds in our database with NWS holdings at the end of the previous quarter.
In the 21st century investor’s toolkit there are several tools stock market investors use to grade their stock investments. A couple of the most useful tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the S&P 500 by a superb amount (see the details here).
Let’s take a gander at the latest hedge fund action regarding News Corp (NASDAQ:NWS).
How are hedge funds trading News Corp (NASDAQ:NWS)?
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from the fourth quarter of 2018. By comparison, 10 hedge funds held shares or bullish call options in NWS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, CQS Cayman LP held the most valuable stake in News Corp (NASDAQ:NWS), which was worth $9.8 million at the end of the first quarter. On the second spot was Tensile Capital which amassed $9.4 million worth of shares. Moreover, Renaissance Technologies, GAMCO Investors, and Citadel Investment Group were also bullish on News Corp (NASDAQ:NWS), allocating a large percentage of their portfolios to this stock.
Judging by the fact that News Corp (NASDAQ:NWS) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedgies who sold off their positions entirely by the end of the third quarter. Interestingly, Charles de Vaulx’s International Value Advisers sold off the biggest investment of the 700 funds followed by Insider Monkey, comprising about $43.6 million in stock. Richard S. Pzena’s fund, Pzena Investment Management, also dumped its stock, about $1.9 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 3 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to News Corp (NASDAQ:NWS). We will take a look at The Toro Company (NYSE:TTC), TIM Participacoes SA (NYSE:TSU), Voya Financial Inc (NYSE:VOYA), and AMERCO (NASDAQ:UHAL). All of these stocks’ market caps are closest to NWS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TTC | 16 | 577386 | -5 |
| TSU | 16 | 341506 | 2 |
| VOYA | 45 | 1331987 | 7 |
| UHAL | 12 | 390787 | 5 |
| Average | 22.25 | 660417 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $660 million. That figure was $36 million in NWS’s case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table. On the other hand AMERCO (NASDAQ:UHAL) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks News Corp (NASDAQ:NWS) is even less popular than UHAL. Hedge funds clearly dropped the ball on NWS as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on NWS as the stock returned 9.8% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
