The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Tribune Media Company (NYSE:TRCO).
Is Tribune Media Company (NYSE:TRCO) a healthy stock for your portfolio? The best stock pickers are reducing their bets on the stock. The number of bullish hedge fund positions fell by 12 in recent months. Our calculations also showed that TRCO isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s take a peek at the new hedge fund action regarding Tribune Media Company (NYSE:TRCO).
What does the smart money think about Tribune Media Company (NYSE:TRCO)?
At the end of the first quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -30% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TRCO over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Magnetar Capital held the most valuable stake in Tribune Media Company (NYSE:TRCO), which was worth $204.4 million at the end of the first quarter. On the second spot was Water Island Capital which amassed $159 million worth of shares. Moreover, GAMCO Investors, Carlson Capital, and Alpine Associates were also bullish on Tribune Media Company (NYSE:TRCO), allocating a large percentage of their portfolios to this stock.
Since Tribune Media Company (NYSE:TRCO) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few money managers that decided to sell off their entire stakes in the third quarter. Intriguingly, Parag Vora’s HG Vora Capital Management dumped the largest investment of the 700 funds tracked by Insider Monkey, worth an estimated $90.8 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dumped about $22.8 million worth. These moves are important to note, as total hedge fund interest was cut by 12 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tribune Media Company (NYSE:TRCO) but similarly valued. We will take a look at LogMeIn Inc (NASDAQ:LOGM), Cousins Properties Incorporated (NYSE:CUZ), Pebblebrook Hotel Trust (NYSE:PEB), and Floor & Decor Holdings, Inc. (NYSE:FND). All of these stocks’ market caps resemble TRCO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LOGM | 27 | 483334 | -1 |
| CUZ | 22 | 137516 | 5 |
| PEB | 10 | 78480 | -2 |
| FND | 31 | 406072 | 12 |
| Average | 22.5 | 276351 | 3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $276 million. That figure was $1321 million in TRCO’s case. Floor & Decor Holdings, Inc. (NYSE:FND) is the most popular stock in this table. On the other hand Pebblebrook Hotel Trust (NYSE:PEB) is the least popular one with only 10 bullish hedge fund positions. Tribune Media Company (NYSE:TRCO) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on TRCO, though not to the same extent, as the stock returned 0.6% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
