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With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Tegna Inc (NYSE:TGNA).
Is Tegna Inc (NYSE:TGNA) a buy here? Prominent investors were taking a pessimistic view. The number of long hedge fund bets fell by 14 recently. Tegna Inc (NYSE:TGNA) was in 20 hedge funds' portfolios at the end of March. The all time high for this statistic is 37. Our calculations also showed that TGNA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 34 hedge funds in our database with TGNA positions at the end of the fourth quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Bruce Kovner of Caxton Associates LP
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. Keeping this in mind let's check out the latest hedge fund action regarding Tegna Inc (NYSE:TGNA).
Do Hedge Funds Think TGNA Is A Good Stock To Buy Now?
At Q1's end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -41% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TGNA over the last 23 quarters. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John W. Rogers's Ariel Investments has the largest position in Tegna Inc (NYSE:TGNA), worth close to $148.9 million, comprising 1.5% of its total 13F portfolio. On Ariel Investments's heels is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $61.9 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions encompass Cliff Asness's AQR Capital Management, Renaissance Technologies and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Fairpointe Capital allocated the biggest weight to Tegna Inc (NYSE:TGNA), around 1.71% of its 13F portfolio. Ariel Investments is also relatively very bullish on the stock, dishing out 1.47 percent of its 13F equity portfolio to TGNA.
Because Tegna Inc (NYSE:TGNA) has witnessed a decline in interest from hedge fund managers, it's easy to see that there were a few fund managers that elected to cut their positions entirely last quarter. Intriguingly, Barry Rosenstein's JANA Partners said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, comprising close to $23.8 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund said goodbye to about $13.2 million worth. These transactions are interesting, as total hedge fund interest dropped by 14 funds last quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Tegna Inc (NYSE:TGNA) but similarly valued. We will take a look at NewMarket Corporation (NYSE:NEU), APi Group Corporation (NYSE:APG), Jamf Holding Corp. (NASDAQ:JAMF), Artisan Partners Asset Management Inc (NYSE:APAM), Community Bank System, Inc. (NYSE:CBU), Parsons Corporation (NYSE:PSN), and Premier Inc (NASDAQ:PINC). This group of stocks' market values match TGNA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NEU,14,103793,-1 APG,33,1370019,2 JAMF,17,2745414,-9 APAM,21,279518,0 CBU,8,29233,-5 PSN,9,29095,-9 PINC,19,159312,2 Average,17.3,673769,-2.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $674 million. That figure was $334 million in TGNA's case. APi Group Corporation (NYSE:APG) is the most popular stock in this table. On the other hand Community Bank System, Inc. (NYSE:CBU) is the least popular one with only 8 bullish hedge fund positions. Tegna Inc (NYSE:TGNA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TGNA is 31.2. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately TGNA wasn't nearly as popular as these 5 stocks and hedge funds that were betting on TGNA were disappointed as the stock returned -6.1% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.