We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of The New York Times Company (NYSE:NYT) based on that data.
The New York Times Company (NYSE:NYT) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 32 hedge funds' portfolios at the end of March. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as New York Community Bancorp, Inc. (NYSE:NYCB), AngloGold Ashanti Limited (NYSE:AU), and Watsco Inc (NYSE:WSO) to gather more data points.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a look at the fresh hedge fund action surrounding The New York Times Company (NYSE:NYT).
What have hedge funds been doing with The New York Times Company (NYSE:NYT)?
At the end of the first quarter, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NYT over the last 15 quarters. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Darsana Capital Partners was the largest shareholder of The New York Times Company (NYSE:NYT), with a stake worth $328.5 million reported as of the end of March. Trailing Darsana Capital Partners was OZ Management, which amassed a stake valued at $168.9 million. Slate Path Capital, SoMa Equity Partners, and Palestra Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as The New York Times Company (NYSE:NYT) has witnessed a decline in interest from hedge fund managers, logic holds that there was a specific group of fund managers that decided to sell off their positions entirely in the third quarter. Intriguingly, Irving Kahn's Kahn Brothers dumped the biggest position of the "upper crust" of funds watched by Insider Monkey, valued at about $27.4 million in stock, and Philip Hilal's Clearfield Capital was right behind this move, as the fund dumped about $10.5 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as The New York Times Company (NYSE:NYT) but similarly valued. We will take a look at New York Community Bancorp, Inc. (NYSE:NYCB), AngloGold Ashanti Limited (NYSE:AU), Watsco Inc (NYSE:WSO), and Syneos Health, Inc. (NASDAQ:SYNH). This group of stocks' market valuations resemble NYT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NYCB,12,86969,-3 AU,23,356908,11 WSO,18,137568,4 SYNH,26,333112,2 Average,19.75,228639,3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $229 million. That figure was $1169 million in NYT's case. Syneos Health, Inc. (NASDAQ:SYNH) is the most popular stock in this table. On the other hand New York Community Bancorp, Inc. (NYSE:NYCB) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks The New York Times Company (NYSE:NYT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately NYT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on NYT were disappointed as the stock returned -1.8% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.