We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of Quad/Graphics, Inc. (NYSE:QUAD) based on that data.
Is Quad/Graphics, Inc. (NYSE:QUAD) a bargain? Money managers are becoming more confident. The number of bullish hedge fund bets moved up by 7 recently. Our calculations also showed that QUAD isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 take a gander at the latest hedge fund action regarding Quad/Graphics, Inc. (NYSE:QUAD).
What does the smart money think about Quad/Graphics, Inc. (NYSE:QUAD)?
Heading into the first quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 54% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in QUAD a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Quad/Graphics, Inc. (NYSE:QUAD) was held by Renaissance Technologies, which reported holding $7.3 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $6.1 million position. Other investors bullish on the company included GLG Partners, Millennium Management, and Water Island Capital.
Now, key money managers have been driving this bullishness. Water Island Capital, managed by John Orrico, initiated the biggest position in Quad/Graphics, Inc. (NYSE:QUAD). Water Island Capital had $2.4 million invested in the company at the end of the quarter. Paul Glazer’s Glazer Capital also initiated a $1.6 million position during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Paul Tudor Jones’s Tudor Investment Corp, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Quad/Graphics, Inc. (NYSE:QUAD) but similarly valued. These stocks are SurModics, Inc. (NASDAQ:SRDX), AC Immune SA (NASDAQ:ACIU), GoPro Inc (NASDAQ:GPRO), and Funko, Inc. (NASDAQ:FNKO). This group of stocks’ market caps are similar to QUAD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SRDX | 17 | 144091 | 4 |
| ACIU | 8 | 71314 | -1 |
| GPRO | 13 | 47714 | -1 |
| FNKO | 13 | 39529 | 3 |
| Average | 12.75 | 75662 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $34 million in QUAD’s case. SurModics, Inc. (NASDAQ:SRDX) is the most popular stock in this table. On the other hand AC Immune SA (NASDAQ:ACIU) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Quad/Graphics, Inc. (NYSE:QUAD) is more popular among hedge funds. 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. Unfortunately QUAD wasn’t nearly as popular as these 15 stock and hedge funds that were betting on QUAD were disappointed as the stock returned 0.6% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
