Tribune Publishing Co (TPUB): Are Hedge Funds Right About This Stock?

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Tribune Publishing Co (NYSE:TPUB).

Is Tribune Publishing Co a buy, sell, or hold? The stock of the small-cap multimedia company lost 50% in the third quarter and hedge funds are in a bearish mood. The number of bullish hedge fund positions decreased by 4 between July and September. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives and that’s why at the end of this article we will examine companies such as Peregrine Pharmaceuticals (NASDAQ:PPHM), Black Diamond Inc (NASDAQ:BDE), and China XD Plastics Co Ltd (NASDAQ:CXDC) to gather more data points.

To most investors, hedge funds are assumed to be underperforming, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, Our experts look at the top tier of this club, approximately 700 funds. These investment experts direct most of the hedge fund industry’s total asset base, and by paying attention to their top picks, Insider Monkey has figured out a few investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, let’s take a gander at the latest action surrounding Tribune Publishing Co (NYSE:TPUB).

What does the smart money think about Tribune Publishing Co (NYSE:TPUB)?

Heading into Q4, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 29% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Oaktree Capital Management, managed by Howard Marks, holds the largest position in Tribune Publishing Co (NYSE:TPUB). Oaktree Capital Management has a $36.8 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is MSDC Management, led by Marc Lisker, Glenn Fuhrman and John Phelan, holding a $1.3 million position; less than 0.1% of its 13F portfolio is allocated to the stock. The remaining members of the smart money that are bullish include Ken Griffin’s Citadel Investment Group, Jim Simons’ Renaissance Technologies, and Peter Muller’s PDT Partners.

Because Tribune Publishing Co (NYSE:TPUB) has witnessed a declining sentiment from the smart money, it’s safe to say that there exists a select few hedge funds that elected to cut their entire stakes by the end of the third quarter. Interestingly, Israel Englander’s Millennium Management cut the largest position of all the hedgies monitored by Insider Monkey, totaling close to $3.8 million in stock. Millennium Management Subsidiary’s fund, Blue Arrow Capital Management, also sold off its stock, about $1.4 million worth.

Let’s now review hedge fund activity in other stocks similar to Tribune Publishing Co (NYSE:TPUB). These stocks are Peregrine Pharmaceuticals (NASDAQ:PPHM), Black Diamond Inc (NASDAQ:BDE), China XD Plastics Co Ltd (NASDAQ:CXDC), and Enzymotec Ltd (NASDAQ:ENZY). This group of stocks’ market values match TPUB’s market value.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $41 million in TPUB’s case. Black Diamond Inc (NASDAQ:BDE) is the most popular stock in this table with a total of eight funds reporting stakes. On the other hand China XD Plastics Co Ltd (NASDAQ:CXDC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Tribune Publishing Co (NYSE:TPUB) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.