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Hedge Funds Aren’t Crazy About Meredith Corporation (MDP) Anymore

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Meredith Corporation (NYSE:MDP) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. MDP has experienced a decrease in support from the world’s most elite money managers in recent months. There were 14 hedge funds in our database with MDP holdings at the end of the previous quarter.

According to most investors, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the bigwigs of this club, about 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by keeping an eye on their highest performing equity investments, we have unsheathed a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Just as important, positive insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are a variety of motivations for an insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if you understand where to look (learn more here).

With all of this in mind, we’re going to take a look at the latest action regarding Meredith Corporation (NYSE:MDP).

How have hedgies been trading Meredith Corporation (NYSE:MDP)?

In preparation for this year, a total of 11 of the hedge funds we track were bullish in this stock, a change of -21% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the largest position in Meredith Corporation (NYSE:MDP). Royce & Associates has a $89.4 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Ariel Investments, managed by John W. Rogers, which held a $59 million position; 1.2% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include David Dreman’s Dreman Value Management, Ken Fisher’s Fisher Asset Management and Mario Gabelli’s GAMCO Investors.

Due to the fact that Meredith Corporation (NYSE:MDP) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds that decided to sell off their full holdings last quarter. Intriguingly, Jim Simons’s Renaissance Technologies dropped the largest stake of all the hedgies we watch, valued at about $1.2 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund sold off about $1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.

How are insiders trading Meredith Corporation (NYSE:MDP)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, Meredith Corporation (NYSE:MDP) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Meredith Corporation (NYSE:MDP). These stocks are The Dolan Company (NYSE:DM), Reed Elsevier plc (ADR) (NYSE:RUK), Reed Elsevier NV (ADR) (NYSE:ENL), , and Martha Stewart Living Omnimedia, Inc. (NYSE:MSO). All of these stocks are in the publishing – periodicals industry and their market caps resemble MDP’s market cap.

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