We at Insider Monkey have gone over 817 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 September 30th. In this article, we look at what those funds think of iHeartMedia, Inc. (NASDAQ:IHRT) based on that data.
Is IHRT a good stock to buy now? Prominent investors were reducing their bets on the stock. The number of long hedge fund positions were trimmed by 3 in recent months. iHeartMedia, Inc. (NASDAQ:IHRT) was in 21 hedge funds' portfolios at the end of September. The all time high for this statistic is 31. Our calculations also showed that IHRT isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 24 hedge funds in our database with IHRT holdings at the end of June. Video: Watch our video about the top 5 most popular hedge fund stocks.
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 66 percentage points since March 2017 (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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Andy Redleaf of Whitebox Advisors
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 15 best blue chip stocks 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. Now we're going to analyze the latest hedge fund action regarding iHeartMedia, Inc. (NASDAQ:IHRT).
Do Hedge Funds Think IHRT Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. By comparison, 26 hedge funds held shares or bullish call options in IHRT a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Brigade Capital held the most valuable stake in iHeartMedia, Inc. (NASDAQ:IHRT), which was worth $23.2 million at the end of the third quarter. On the second spot was OZ Management which amassed $21.8 million worth of shares. Contrarius Investment Management, Contrarian Capital, and Senator 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 Contrarian Capital allocated the biggest weight to iHeartMedia, Inc. (NASDAQ:IHRT), around 5.61% of its 13F portfolio. Half Sky Capital is also relatively very bullish on the stock, dishing out 3.51 percent of its 13F equity portfolio to IHRT.
Because iHeartMedia, Inc. (NASDAQ:IHRT) has witnessed declining sentiment from hedge fund managers, we can see that there exists a select few hedgies that slashed their entire stakes in the third quarter. At the top of the heap, Kenneth Mario Garschina's Mason Capital Management sold off the largest stake of the 750 funds monitored by Insider Monkey, valued at close to $8.6 million in stock, and Howard Marks's Oaktree Capital Management was right behind this move, as the fund dumped about $6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds in the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as iHeartMedia, Inc. (NASDAQ:IHRT) but similarly valued. These stocks are UMH Properties, Inc (NYSE:UMH), ConnectOne Bancorp Inc (NASDAQ:CNOB), Trueblue Inc (NYSE:TBI), National Energy Services Reunited Corp. (NASDAQ:NESR), MarineMax, Inc. (NYSE:HZO), XBiotech Inc. (NASDAQ:XBIT), and Independence Holding Company (NYSE:IHC). This group of stocks' market valuations resemble IHRT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UMH,8,7977,2 CNOB,9,19690,-2 TBI,15,46144,1 NESR,8,26931,0 HZO,21,52688,0 XBIT,4,2598,0 IHC,5,26115,0 Average,10,26020,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $117 million in IHRT's case. MarineMax, Inc. (NYSE:HZO) is the most popular stock in this table. On the other hand XBiotech Inc. (NASDAQ:XBIT) is the least popular one with only 4 bullish hedge fund positions. iHeartMedia, Inc. (NASDAQ:IHRT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IHRT is 72.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on IHRT as the stock returned 52.7% since the end of Q3 (through 12/14) 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.