The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at E.W. Scripps Co (NYSE:SSP) from the perspective of those successful funds.
Is E.W. Scripps Co (NYSE:SSP) a superb stock to buy now? Investors who are in the know are surely turning bullish. The number of long hedge fund positions that are disclosed in regulatory 13F filings moved up by 2 lately. In this way, there were 10 hedge funds in our database with SSP positions at the end of the last quarter. At the end of this article we will also compare SSP to other stocks including SUPERVALU INC. (NYSE:SVU), Neenah Paper, Inc. (NYSE:NP), and Universal Corp (NYSE:UVV) to get a better sense of its popularity.
Follow E.w. Scripps Co (NYSE:SSP)
Follow E.w. Scripps Co (NYSE:SSP)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Hedge fund activity in E.W. Scripps Co (NYSE:SSP)
Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 25% from the previous quarter. By comparison, 9 hedge funds held shares or bullish call options in SSP heading into this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Mario Gabelli’s GAMCO Investors has the largest position in E.W. Scripps Co (NYSE:SSP), worth close to $123.5 million. Sitting at the No. 2 spot is Jeffrey Bronchick of Cove Street Capital, with a $17.2 million position; 1.9% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism include Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management, Chuck Royce’s Royce & Associates and Steve Ketchum’s Sound Point Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Cove Street Capital, led by Jeffrey Bronchick, established the largest position in E.W. Scripps Co (NYSE:SSP). Cove Street Capital had $17.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $1.5 million position during the quarter. The other funds with brand new SSP positions are Matthew Tewksbury’s Stevens Capital Management, Ken Griffin’s Citadel Investment Group, and Joel Greenblatt’s Gotham Asset Management.
Let’s go over hedge fund activity in other stocks similar to E.W. Scripps Co (NYSE:SSP). We will take a look at SUPERVALU INC. (NYSE:SVU), Neenah Paper, Inc. (NYSE:NP), Universal Corp (NYSE:UVV), and Exponent, Inc. (NASDAQ:EXPO). This group of stocks’ market values are similar to SSP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SVU | 31 | 324342 | 3 |
| NP | 10 | 94224 | 3 |
| UVV | 14 | 67507 | 0 |
| EXPO | 8 | 60977 | -1 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $137 million. That figure was $175 million in SSP’s case. SUPERVALU INC. (NYSE:SVU) is the most popular stock in this table. On the other hand Exponent, Inc. (NASDAQ:EXPO) is the least popular one with only 8 bullish hedge fund positions. E.W. Scripps Co (NYSE:SSP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SVU might be a better candidate to consider taking a long position in.
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