A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Quad/Graphics, Inc. (NYSE:QUAD).
Hedge fund interest in Quad/Graphics, Inc. (NYSE:QUAD) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that QUAD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO), Farmer Brothers Co. (NASDAQ:FARM), and ObsEva SA (NASDAQ:OBSV) to gather more data points.
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 S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Bill Miller of Miller Value Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to go over the latest hedge fund action encompassing Quad/Graphics, Inc. (NYSE:QUAD).
Do Hedge Funds Think QUAD Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position 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 $4.5 million worth of stock at the end of June. It was followed by Two Sigma Advisors with a $2.2 million position. Other investors bullish on the company included D E Shaw, Miller Value Partners, and Marshall Wace LLP. In terms of the portfolio weights assigned to each position Miller Value Partners allocated the biggest weight to Quad/Graphics, Inc. (NYSE:QUAD), around 0.05% of its 13F portfolio. Algert Global is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to QUAD.
Because Quad/Graphics, Inc. (NYSE:QUAD) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few hedgies that slashed their full holdings heading into Q3. It’s worth mentioning that Ken Griffin’s Citadel Investment Group dumped the biggest investment of all the hedgies watched by Insider Monkey, comprising close to $0.1 million in stock. Jonathan Soros’s fund, JS Capital, also said goodbye to its stock, about $0.1 million worth. These transactions are interesting, as total 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 Quad/Graphics, Inc. (NYSE:QUAD). These stocks are AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO), Farmer Brothers Co. (NASDAQ:FARM), ObsEva SA (NASDAQ:OBSV), Capital Product Partners L.P. (NASDAQ:CPLP), SWK Holdings Corporation (NASDAQ:SWKH), Akumin Inc. (NASDAQ:AKU), and Superior Industries International Inc. (NYSE:SUP). This group of stocks’ market values resemble QUAD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVEO | 11 | 27799 | -4 |
| FARM | 12 | 47230 | 2 |
| OBSV | 3 | 655 | 0 |
| CPLP | 4 | 4454 | -1 |
| SWKH | 6 | 188001 | 3 |
| AKU | 3 | 56647 | -3 |
| SUP | 15 | 30587 | 3 |
| Average | 7.7 | 50768 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.7 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $14 million in QUAD’s case. Superior Industries International Inc. (NYSE:SUP) is the most popular stock in this table. On the other hand ObsEva SA (NASDAQ:OBSV) is the least popular one with only 3 bullish hedge fund positions. Quad/Graphics, Inc. (NYSE:QUAD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for QUAD is 47.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on QUAD as the stock returned 10.4% since the end of Q2 (through 9/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
