Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Meredith Corporation (NYSE:MDP) was in 17 hedge funds’ portfolios at the end of September. MDP investors should be aware of an increase in activity from the world’s largest hedge funds of late. There were 15 hedge funds in our database with MDP holdings at the end of the previous quarter. At the end of this article we will also compare MDP to other stocks including HNI Corp (NYSE:HNI), Party City Holdco Inc (NYSE:PRTY), and KLX Inc (NASDAQ:KLXI) to get a better sense of its popularity.
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With all of this in mind, we’re going to take a look at the new action encompassing Meredith Corporation (NYSE:MDP).
Hedge fund activity in Meredith Corporation (NYSE:MDP)
Heading into Q4, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the biggest position in Meredith Corporation (NYSE:MDP). Royce & Associates has a $112.8 million position in the stock, comprising 0.6% of its 13F portfolio. On Royce & Associates’ heels is Fisher Asset Management, led by Ken Fisher, holding a $41 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Alec Litowitz and Ross Laser’s Magnetar Capital, Joel Greenblatt’s Gotham Asset Management and Mario Gabelli’s GAMCO Investors.
As one would reasonably expect, key money managers have been driving this bullishness. Magnetar Capital, managed by Alec Litowitz and Ross Laser, assembled the most outsized position in Meredith Corporation (NYSE:MDP). Magnetar Capital had $28.5 million invested in the company at the end of the quarter. Richard Driehaus’ Driehaus Capital also initiated a $5.1 million position during the quarter. The following funds were also among the new MDP investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Jacob Gottlieb’s Visium Asset Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Meredith Corporation (NYSE:MDP) but similarly valued. We will take a look at HNI Corp (NYSE:HNI), Party City Holdco Inc (NYSE:PRTY), KLX Inc (NASDAQ:KLXI), and FleetMatics Group PLC (NYSE:FLTX). This group of stocks’ market caps are closest to MDP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HNI | 14 | 61309 | 2 |
| PRTY | 12 | 82573 | -6 |
| KLXI | 34 | 692485 | -2 |
| FLTX | 13 | 68660 | 1 |
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $226 million. That figure was $336 million in MDP’s case. KLX Inc (NASDAQ:KLXI) is the most popular stock in this table. On the other hand Party City Holdco Inc (NYSE:PRTY) is the least popular one with only 12 bullish hedge fund positions. Meredith Corporation (NYSE:MDP) 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 KLXI might be a better candidate to consider a long position.
