Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Nexstar Media Group, Inc. (NASDAQ:NXST) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Nexstar Media Group, Inc. (NASDAQ:NXST) was in 38 hedge funds’ portfolios at the end of September. The all time high for this statistic is 50. NXST has experienced an increase in hedge fund interest of late. There were 34 hedge funds in our database with NXST positions at the end of the second quarter. Our calculations also showed that NXST isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Steven Tananbaum of GoldenTree Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s take a look at the recent hedge fund action regarding Nexstar Media Group, Inc. (NASDAQ:NXST).
Do Hedge Funds Think NXST Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from the second quarter of 2021. On the other hand, there were a total of 41 hedge funds with a bullish position in NXST a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baupost Group held the most valuable stake in Nexstar Media Group, Inc. (NASDAQ:NXST), which was worth $310.9 million at the end of the third quarter. On the second spot was Cardinal Capital which amassed $166.4 million worth of shares. Park West Asset Management, P2 Capital Partners, and QVT Financial were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Billings Capital Management allocated the biggest weight to Nexstar Media Group, Inc. (NASDAQ:NXST), around 11.31% of its 13F portfolio. Brightline Capital is also relatively very bullish on the stock, earmarking 8.7 percent of its 13F equity portfolio to NXST.
As aggregate interest increased, some big names have jumped into Nexstar Media Group, Inc. (NASDAQ:NXST) headfirst. Chiron Investment Management, managed by Ryan Caldwell, established the most outsized position in Nexstar Media Group, Inc. (NASDAQ:NXST). Chiron Investment Management had $18.2 million invested in the company at the end of the quarter. Steven Tananbaum’s GoldenTree Asset Management also made a $16 million investment in the stock during the quarter. The other funds with brand new NXST positions are Peter Algert’s Algert Global, Greg Eisner’s Engineers Gate Manager, and Nick Thakore’s Diametric Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nexstar Media Group, Inc. (NASDAQ:NXST) but similarly valued. We will take a look at Texas Roadhouse Inc (NASDAQ:TXRH), VCA Antech Inc (NASDAQ:WOOF), Stag Industrial Inc (NYSE:STAG), Inspire Medical Systems, Inc. (NYSE:INSP), CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS), iQIYI, Inc. (NASDAQ:IQ), and Kingsoft Cloud Holdings Limited (NASDAQ:KC). This group of stocks’ market valuations match NXST’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TXRH | 36 | 993486 | -1 |
| WOOF | 26 | 319858 | -1 |
| STAG | 17 | 219383 | 2 |
| INSP | 29 | 478246 | -3 |
| CCCS | 28 | 228410 | 28 |
| IQ | 23 | 476604 | -4 |
| KC | 12 | 31613 | 0 |
| Average | 24.4 | 392514 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $393 million. That figure was $874 million in NXST’s case. Texas Roadhouse Inc (NASDAQ:TXRH) is the most popular stock in this table. On the other hand Kingsoft Cloud Holdings Limited (NASDAQ:KC) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Nexstar Media Group, Inc. (NASDAQ:NXST) is more popular among hedge funds. Our overall hedge fund sentiment score for NXST is 81.8. 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 returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on NXST as the stock returned 9.3% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
