Many investors, including Carl Icahn and Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance as a result. In this article we will find out how hedge fund sentiment towards Gannett Co., Inc. (NYSE:GCI) changed recently.
Gannett Co., Inc. (NYSE:GCI) investors should be aware of an increase in hedge fund sentiment of late. Gannett Co., Inc. was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. There were 14 hedge funds in our database with Gannett Co., Inc. positions at the end of the previous quarter. At the end of this article we will also compare GCI to other stocks including Mueller Industries, Inc. (NYSE:MLI), DuPont Fabros Technology, Inc. (NYSE:DFT), and Planet Fitness Inc (NYSE:PLNT) to get a better sense of its popularity.
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To the average investor there are dozens of tools stock market investors can use to analyze publicly traded companies. A duo of the best tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top investment managers can outclass the market by a solid amount (see the details here).
Keeping this in mind, we’re going to take a look at the recent action encompassing Gannett Co., Inc. (NYSE:GCI).
What does the smart money think about Gannett Co., Inc. (NYSE:GCI)?
Heading into Q4, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 21% rise from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or had already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Carl Icahn’s Icahn Capital LP has the number one position in Gannett Co., Inc. (NYSE:GCI), worth close to $110.2 million, comprising 0.4% of its total 13F portfolio. Sitting in the two-spot is D E Shaw, which holds a $16.4 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Israel Englander’s Millennium Management, and Kenneth Squire’s 13D Management.
As one would reasonably expect, specific money managers have been driving this bullishness. D E Shaw established the biggest position in Gannett Co., Inc. (NYSE:GCI). Arrowstreet Capital also made a $13.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Millennium Management, Joel Greenblatt’s Gotham Asset Management, and Gordy Holterman and Derek Dunn’s Overland Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Gannett Co., Inc. (NYSE:GCI) but similarly valued. We will take a look at Mueller Industries, Inc. (NYSE:MLI), DuPont Fabros Technology, Inc. (NYSE:DFT), Planet Fitness Inc (NYSE:PLNT), and Healthequity Inc (NASDAQ:HQY). This group of stocks’ market values are closest to GCI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MLI | 16 | 300261 | 0 |
| DFT | 16 | 173247 | 2 |
| PLNT | 14 | 62285 | 14 |
| HQY | 13 | 84565 | 1 |
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $183 million in GCI’s case. Mueller Industries, Inc. (NYSE:MLI) is the most popular stock in this table. On the other hand Healthequity Inc (NASDAQ:HQY) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Gannett Co., Inc. (NYSE:GCI) 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.
