Is New York Times (NYT) Stock A Buy or Sell?
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider The New York Times Company (NYSE:NYT) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is NYT stock a buy or sell? Money managers were turning bullish. The number of bullish hedge fund positions inched up by 5 in recent months. The New York Times Company (NYSE:NYT) was in 50 hedge funds' portfolios at the end of December. The all time high for this statistic is 45. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NYT isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 45 hedge funds in our database with NYT holdings at the end of September.
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' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).
Daniel Sundheim of D1 Capital Partners
At Insider Monkey we leave no stone unturned when looking for 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 hydrogen fuel cell 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 (or at the end of this article). Now we're going to take a look at the recent hedge fund action encompassing The New York Times Company (NYSE:NYT).
Do Hedge Funds Think NYT Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 50 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NYT over the last 22 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Darsana Capital Partners, managed by Anand Desai, holds the biggest position in The New York Times Company (NYSE:NYT). Darsana Capital Partners has a $517.7 million position in the stock, comprising 14.6% of its 13F portfolio. The second largest stake is held by Farallon Capital, holding a $338.9 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism include Daniel Sundheim's D1 Capital Partners, Renaissance Technologies and William Duhamel's Route One Investment Company. 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 21.03% of its 13F portfolio. Darsana Capital Partners is also relatively very bullish on the stock, dishing out 14.61 percent of its 13F equity portfolio to NYT.
Consequently, key hedge funds were leading the bulls' herd. Anabranch Capital, managed by Alexander Shapiro, assembled the largest position in The New York Times Company (NYSE:NYT). Anabranch Capital had $34.2 million invested in the company at the end of the quarter. Stanley Druckenmiller's Duquesne Capital also initiated a $26.6 million position during the quarter. The other funds with new positions in the stock are Brennan Diaz's Fernbridge Capital Management, Sharlyn C. Heslam's Stockbridge Partners, and Dmitry Balyasny's Balyasny Asset Management.
Let's check out hedge fund activity in other stocks similar to The New York Times Company (NYSE:NYT). These stocks are Tapestry, Inc. (NYSE:TPR), Globant SA (NYSE:GLOB), Alleghany Corporation (NYSE:Y), Dada Nexus Limited (NASDAQ:DADA), AGNC Investment Corp. (NASDAQ:AGNC), Hubbell Incorporated (NYSE:HUBB), and ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). All of these stocks' market caps are similar to NYT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TPR,49,1295430,10 GLOB,15,279923,-6 Y,34,364699,5 DADA,25,168093,8 AGNC,25,353105,-7 HUBB,22,425947,-8 ACAD,38,3081113,-3 Average,29.7,852616,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $853 million. That figure was $2750 million in NYT's case. Tapestry, Inc. (NYSE:TPR) is the most popular stock in this table. On the other hand Globant SA (NYSE:GLOB) is the least popular one with only 15 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 90. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Unfortunately NYT wasn't nearly as popular as these 30 stocks and hedge funds that were betting on NYT were disappointed as the stock returned -3.4% since the end of the fourth quarter (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
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