Is Entravision Communication (EVC) A Good Stock To Buy?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Entravision Communication (NYSE:EVC) investors should be aware of a decrease in support from the world’s most elite money managers of late, as hedge fund ownership slipped by 1. At the end of this article we will also compare EVC to other stocks including 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), Qiwi PLC (NASDAQ:QIWI), and Rayonier Advanced Materials Inc (NYSE:RYAM) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

How are hedge funds trading Entravision Communication (NYSE:EVC)?

Heading into the fourth quarter of 2016, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 5% dip from one quarter earlier. After a volatile couple of quarters in terms of hedge fund ownership, the stock appears to have settled into a groove. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, West Face Capital, managed by Greg Boland, holds the most valuable position in Entravision Communication (NYSE:EVC). West Face Capital has a $46 million position in the stock, comprising 26.3% of its 13F portfolio. Coming in second is William C. Martin of Raging Capital Management, with a $14 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other professional money managers that are bullish include Jim Simons’ Renaissance Technologies, Jeffrey Bronchick’s Cove Street Capital and Chuck Royce’s Royce & Associates.

Seeing as Entravision Communication (NYSE:EVC) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there was a specific group of hedgies who sold off their positions entirely last quarter. Interestingly, Matthew Taylor and Ty Popplewell’s Kortright Capital Partners sold off the largest investment of the 700 funds followed by Insider Monkey, totaling close to $1.9 million in stock. Solomon Kumin’s fund, Folger Hill Asset Management, also dropped its stock, about $1.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 fund last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Entravision Communication (NYSE:EVC) but similarly valued. We will take a look at 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), Qiwi PLC (NASDAQ:QIWI), Rayonier Advanced Materials Inc (NYSE:RYAM), and Virtus Investment Partners Inc (NASDAQ:VRTS). All of these stocks’ market caps resemble EVC’s market cap.

As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $138 million in EVC’s case. Rayonier Advanced Materials Inc (NYSE:RYAM) is the most popular stock in this table. On the other hand Qiwi PLC (NASDAQ:QIWI) is the least popular one with only 9 bullish hedge fund positions. Entravision Communication (NYSE:EVC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RYAM might be a better candidate to consider a long position.

Disclosure: None