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Ariel Investments, Still Positive with Meredith (MDP)

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Ariel Investments, a minority-owned investment company that focuses in small and mid-capitalized US based stocks, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 4.56% was recorded by the fund for the 3rd Quarter of 2020, ahead of its Russell 2500 Value benchmark that returned 3.54%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Ariel Investments in their Q3 2020 Investor Letter said that they were able to distinguish a value in Meredith Corporation (NYSE: MDP) and even that it underperformed, it is still considered a good position for the hedge fund. Meredith Corporation is a television broadcaster and magazine advertiser that currently has a $899.487 million market cap. For the past 3 months, MDP delivered a huge 63.95% return and settled at $19.74 per share at the closing of January 14th.

Here is what Ariel Investments has to say about BOK Financial Corp. in their Investor Letter:

" Television broadcaster and magazine advertiser, Meredith Corporation (NYSE: MDP) underperformed, as Covid added to the existing challenge of generating cost synergies from the TIME acquisition. The stock was also impacted by being removed from a high dividend yield index. While we acknowledge the challenging fundamentals in its business, local news viewership is up tremendously in the midst of the pandemic and we believe MDP’s profitable local television stations provide a margin of safety1 at today’s valuation level. "

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Last December 2020, we published an article telling that Meredith Corporation (NYSE: MDP) was in 18 hedge funds’ portfolio, almost making it to its all time high statistics of 20. Meredith Corporation still proved its worth by delivering a 2.81% return YTD.

As of September 2020, Ariel Investments had a 3.7 million share position in MDP that amounted to $48.8 million. This made Ariel Investments the top 2 hedge fund that holds most of MDP’s stake, just 1 position behind Select Equity Group with $56 million worth of MDP shares. However, our calculations showed that Meredith Corporation (NYSE: MDP) does not belong to the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website.

Disclosure: None. This article is originally published at Insider Monkey.