Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds’ top consensus picks. This year hedge funds’ top 30 stock picks outperformed the S&P 500 Index by 4 percentage points through the middle of November. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Hedge fund interest in Gannett Co., Inc. (NYSE:GCI) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare GCI to other stocks including Conn’s, Inc. (NASDAQ:CONN), Government Properties Income Trust (NASDAQ:GOV), and Infinera Corp. (NASDAQ:INFN) to get a better sense of its popularity.
At the moment there are tons of indicators shareholders can use to appraise their stock investments. A pair of the most useful indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the best fund managers can beat the S&P 500 by a solid amount (see the details here).
Let’s take a glance at the new hedge fund action regarding Gannett Co., Inc. (NYSE:GCI).
What have hedge funds been doing with Gannett Co., Inc. (NYSE:GCI)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, representing no change from the previous quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in GCI at the beginning of this year. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Gannett Co., Inc. (NYSE:GCI). Citadel Investment Group has a $8.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is D E Shaw, led by D. E. Shaw, holding a $6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish include Joel Greenblatt’s Gotham Asset Management, Noam Gottesman’s GLG Partners and Steve Cohen’s Point72 Asset Management.
Due to the fact that Gannett Co., Inc. (NYSE:GCI) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedgies who sold off their positions entirely in the third quarter. Intriguingly, Mike Vranos’s Ellington cut the biggest stake of the “upper crust” of funds watched by Insider Monkey, comprising about $0.5 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its stock, about $0.5 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Gannett Co., Inc. (NYSE:GCI). These stocks are Conn’s, Inc. (NASDAQ:CONN), Government Properties Income Trust (NASDAQ:GOV), Infinera Corp. (NASDAQ:INFN), and Wesco Aircraft Holdings Inc (NYSE:WAIR). All of these stocks’ market caps resemble GCI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CONN | 19 | 286038 | 1 |
| GOV | 15 | 36026 | 7 |
| INFN | 25 | 120244 | 13 |
| WAIR | 17 | 243268 | 5 |
| Average | 19 | 171394 | 6.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $171 million. That figure was $40 million in GCI’s case. Infinera Corp. (NASDAQ:INFN) is the most popular stock in this table. On the other hand Government Properties Income Trust (NASDAQ:GOV) is the least popular one with only 15 bullish hedge fund positions. Gannett Co., Inc. (NYSE:GCI) 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 INFN might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
