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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the second quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Meredith Corporation (NYSE:MDP) based on that data.
Meredith Corporation (NYSE:MDP) was in 22 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 25. MDP shareholders have witnessed a decrease in hedge fund sentiment in recent months. There were 25 hedge funds in our database with MDP holdings at the end of March. Our calculations also showed that MDP isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
John Rogers of Ariel Investments
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. With all of this in mind let's take a peek at the new hedge fund action surrounding Meredith Corporation (NYSE:MDP).
Do Hedge Funds Think MDP Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the first quarter of 2020. On the other hand, there were a total of 20 hedge funds with a bullish position in MDP a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Ariel Investments was the largest shareholder of Meredith Corporation (NYSE:MDP), with a stake worth $119.5 million reported as of the end of June. Trailing Ariel Investments was Select Equity Group, which amassed a stake valued at $45.6 million. Royce & Associates, GAMCO Investors, and Citadel Investment Group 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 Ursa Fund Management allocated the biggest weight to Meredith Corporation (NYSE:MDP), around 10.48% of its 13F portfolio. AREX Capital Management is also relatively very bullish on the stock, setting aside 1.6 percent of its 13F equity portfolio to MDP.
Due to the fact that Meredith Corporation (NYSE:MDP) has witnessed bearish sentiment from the aggregate hedge fund industry, it's easy to see that there exists a select few funds who were dropping their entire stakes last quarter. At the top of the heap, Christian Leone's Luxor Capital Group cut the largest investment of the "upper crust" of funds tracked by Insider Monkey, worth about $5.9 million in stock. Michael Burry's fund, Scion Asset Management, also dumped its stock, about $4.2 million worth. These moves are interesting, as total hedge fund interest was cut by 3 funds last quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Meredith Corporation (NYSE:MDP) but similarly valued. These stocks are Heartland Financial USA Inc (NASDAQ:HTLF), Array Biopharma Inc (NASDAQ:ARRY), BTRS Holdings Inc. (NASDAQ:BTRS), NuStar Energy L.P. (NYSE:NS), Genworth Financial Inc (NYSE:GNW), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), and McGrath RentCorp (NASDAQ:MGRC). This group of stocks' market values are closest to MDP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HTLF,9,28120,-3 ARRY,18,88203,-12 BTRS,21,249368,-5 NS,3,24910,-1 GNW,20,168414,-4 AAWW,26,344696,-3 MGRC,15,84697,2 Average,16,141201,-3.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $141 million. That figure was $310 million in MDP's case. Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 3 bullish hedge fund positions. Meredith Corporation (NYSE:MDP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDP is 69.7. 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 gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on MDP as the stock returned 34.4% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.