What Do Hedge Funds Think of Graham Holdings Co (GHC)?

We can judge whether Graham Holdings Co (NYSE:GHC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.

Graham Holdings Co (NYSE:GHC) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. GHC was in 28 hedge funds’ portfolios at the end of September. There were 36 hedge funds in our database with GHC positions at the end of the previous quarter. At the end of this article we will also compare GHC to other stocks including VWR Corp (NASDAQ:VWR), SYNNEX Corporation (NYSE:SNX), and WEX Inc (NYSE:WEX) to get a better sense of its popularity.

Now, let’s view the fresh action regarding Graham Holdings Co (NYSE:GHC).

Hedge fund activity in Graham Holdings Co (NYSE:GHC)

At Q3’s end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -22% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Mason Hawkins’s Southeastern Asset Management has the largest position in Graham Holdings Co (NYSE:GHC), worth close to $402.3 million, amounting to 3.4% of its total 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, holding an $66.3 million position; 0.1% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions comprise Warren Buffett’s Berkshire Hathaway, Scott Wallace’s Wallace Capital Management and David Harding’s Winton Capital Management.

Because Graham Holdings Co (NYSE:GHC) has witnessed falling interest from the smart money, we can see that there exists a select few funds who sold off their entire stakes in the third quarter. Intriguingly, John Smith Clark’s Southpoint Capital Advisors said goodbye to the largest position of all the hedgies tracked by Insider Monkey, totaling close to $38.1 million in stock, and Howard Guberman’s Gruss Asset Management was right behind this move, as the fund said goodbye to about $26.2 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 8 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Graham Holdings Co (NYSE:GHC). These stocks are VWR Corp (NASDAQ:VWR), SYNNEX Corporation (NYSE:SNX), WEX Inc (NYSE:WEX), and MDU Resources Group Inc (NYSE:MDU). This group of stocks’ market valuations are similar to GHC’s market valuation.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $756 million in GHC’s case. VWR Corp (NASDAQ:VWR) is the most popular stock in this table. On the other hand SYNNEX Corporation (NYSE:SNX) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Graham Holdings Co (NYSE:GHC) 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.