Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
In this article, we’ll take a closer look at the latest hedge fund activity surrounding New Media Investment Group Inc (NYSE:NEWM). At the end of September, 17 funds from our database held shares of New Media Investment Group. At the end of this article we will also compare NEWM to other stocks including Quality Systems, Inc. (NASDAQ:QSII), United Financial Bancorp, Inc. (NASDAQ:UBNK), and Penntex Midstream Partners LP (NASDAQ:PTXP) to get a better sense of its popularity.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
Keeping this in mind, we’re going to take a look at the latest action regarding New Media Investment Group Inc (NYSE:NEWM).
What have hedge funds been doing with New Media Investment Group Inc (NYSE:NEWM)?
Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on New Media Investment Group, which represents an increase of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish positions in NEWM over the last five quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Leon Cooperman’s Omega Advisors has the biggest position in New Media Investment Group Inc (NYSE:NEWM), worth close to $46.2 million, amounting to 1.4% of its total 13F portfolio. On Omega Advisors’s heels is AQR Capital Management, led by Cliff Asness, which holds a $6.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that are bullish comprise Chuck Royce’s Royce & Associates and Robert B. Gillam’s McKinley Capital Management. We should note that Sprott Asset Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.