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The New York Times Company (NYT) Fell Out Of Favor With Hedge Funds?

·6 min read

We at Insider Monkey have gone over 873 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 June 30th. In this article, we look at what those funds think of The New York Times Company (NYSE:NYT) based on that data.

Hedge fund interest in The New York Times Company (NYSE:NYT) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that NYT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare NYT to other stocks including The AZEK Company Inc. (NYSE:AZEK), Woori Financial Group Inc. (NYSE:WF), and People's United Financial, Inc. (NASDAQ:PBCT) to get a better sense of its popularity.

According to most stock holders, hedge funds are seen as unimportant, old financial vehicles of the past. While there are over 8000 funds in operation today, We look at the upper echelon of this club, about 850 funds. These hedge fund managers direct bulk of all hedge funds' total asset base, and by monitoring their unrivaled equity investments, Insider Monkey has unsheathed a few investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .

Ian Wace Marshall Wace
Ian Wace Marshall Wace

Ian Wace of Marshall Wace

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. Keeping this in mind let's take a gander at the fresh hedge fund action regarding The New York Times Company (NYSE:NYT).

Do Hedge Funds Think NYT Is A Good Stock To Buy Now?

At the end of June, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2020. On the other hand, there were a total of 42 hedge funds with a bullish position in NYT a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

The largest stake in The New York Times Company (NYSE:NYT) was held by Darsana Capital Partners, which reported holding $410.4 million worth of stock at the end of June. It was followed by Farallon Capital with a $288.1 million position. Other investors bullish on the company included OZ Management, Stockbridge Partners, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Anabranch Capital allocated the biggest weight to The New York Times Company (NYSE:NYT), around 20.29% of its 13F portfolio. StackLine Partners is also relatively very bullish on the stock, dishing out 12.19 percent of its 13F equity portfolio to NYT.

Because The New York Times Company (NYSE:NYT) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies that elected to cut their entire stakes last quarter. Interestingly, Dan Loeb's Third Point said goodbye to the biggest position of all the hedgies followed by Insider Monkey, comprising an estimated $63.8 million in stock, and Brennan Diaz's Fernbridge Capital Management was right behind this move, as the fund cut about $32.9 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's now review hedge fund activity in other stocks similar to The New York Times Company (NYSE:NYT). We will take a look at The AZEK Company Inc. (NYSE:AZEK), Woori Financial Group Inc. (NYSE:WF), People's United Financial, Inc. (NASDAQ:PBCT), Casey's General Stores, Inc. (NASDAQ:CASY), Coty Inc (NYSE:COTY), Tenet Healthcare Corp (NYSE:THC), and STAAR Surgical Company (NASDAQ:STAA). This group of stocks' market caps match NYT's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AZEK,37,407782,8 WF,2,3694,0 PBCT,24,219174,4 CASY,24,130468,13 COTY,30,381601,5 THC,39,1860668,0 STAA,26,1637023,10 Average,26,662916,5.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $663 million. That figure was $2225 million in NYT's case. Tenet Healthcare Corp (NYSE:THC) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks The New York Times Company (NYSE:NYT) is more popular among hedge funds. Our overall hedge fund sentiment score for NYT is 83.8. 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 returned 22.9% in 2021 through October 1st but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on NYT as the stock returned 14.1% since the end of June (through 10/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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