Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That’s why we pay special attention to hedge fund activity in these stocks.
Hemisphere Media Group Inc (NASDAQ:HMTV) shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. HMTV was in 6 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 8 hedge funds in our database with HMTV positions at the end of the previous quarter. Our calculations also showed that hmtv isn’t among the 30 most popular stocks among hedge funds.
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 market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s view the new hedge fund action encompassing Hemisphere Media Group Inc (NASDAQ:HMTV).
How are hedge funds trading Hemisphere Media Group Inc (NASDAQ:HMTV)?
At Q4’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in HMTV a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fine Capital Partners was the largest shareholder of Hemisphere Media Group Inc (NASDAQ:HMTV), with a stake worth $24.9 million reported as of the end of December. Trailing Fine Capital Partners was Renaissance Technologies, which amassed a stake valued at $8.9 million. North Run Capital, Boardman Bay Capital Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Since Hemisphere Media Group Inc (NASDAQ:HMTV) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there exists a select few money managers that decided to sell off their positions entirely by the end of the third quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group dropped the largest stake of all the hedgies tracked by Insider Monkey, valued at close to $0.2 million in stock. Frederick DiSanto’s fund, Ancora Advisors, also dropped its stock, about $0 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Hemisphere Media Group Inc (NASDAQ:HMTV) but similarly valued. These stocks are Essendant Inc (NASDAQ:ESND), Retail Value Inc. (NYSE:RVI), The Hackett Group, Inc. (NASDAQ:HCKT), and Dorchester Minerals LP (NASDAQ:DMLP). This group of stocks’ market valuations are closest to HMTV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESND | 8 | 47700 | -4 |
| RVI | 13 | 127706 | -3 |
| HCKT | 10 | 62762 | 0 |
| DMLP | 6 | 28582 | 0 |
| Average | 9.25 | 66688 | -1.75 |
View table here if you experience formatting issues.
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 $67 million. That figure was $42 million in HMTV’s case. Retail Value Inc. (NYSE:RVI) is the most popular stock in this table. On the other hand Dorchester Minerals LP (NASDAQ:DMLP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Hemisphere Media Group Inc (NASDAQ:HMTV) is even less popular than DMLP. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on HMTV, though not to the same extent, as the stock returned 21.2% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
