The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards tronc Inc (NASDAQ:TRNC) .
Is tronc Inc (NASDAQ:TRNC) ready to rally soon? Investors who are in the know are categorically in an optimistic mood. The number of bullish hedge fund bets that are revealed through the 13F filings inched up by 2 recently. There were 15 hedge funds in our database with TRNC holdings at the end of the last quarter. At the end of this article we will also compare TRNC to other stocks including Radware Ltd. (NASDAQ:RDWR), Atara Biotherapeutics Inc (NASDAQ:ATRA), and Cedar Realty Trust Inc (NYSE:CDR) to get a better sense of its popularity.
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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.
Hedge fund activity in tronc Inc (NASDAQ:TRNC)
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a rise of 15% from the second quarter of 2016. By comparison, 0 hedge funds held shares or bullish call options in TRNC heading into this year. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Oaktree Capital Management, led by Howard Marks, holds the biggest position in tronc Inc (NASDAQ:TRNC). Oaktree Capital Management has a $79.3 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is Parag Vora of HG Vora Capital Management, with a $61.2 million position; 7.9% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish contain Eric Semler’s TCS Capital Management and Matthew Halbower’s Pentwater Capital Management. We should note that Starboard Value LP 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.
Consequently, some big names have jumped into tronc Inc (NASDAQ:TRNC) headfirst. Starboard Value LP, led by Jeffrey Smith, assembled the most outsized position in tronc Inc (NASDAQ:TRNC). Starboard Value LP had $16 million invested in the company at the end of the quarter. Pentwater Capital Management also made a $2.9 million investment in the stock during the quarter. The other funds with brand new TRNC positions are Andre F. Perold’s HighVista Strategies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Let’s also examine hedge fund activity in other stocks similar to tronc Inc (NASDAQ:TRNC). These stocks are Radware Ltd. (NASDAQ:RDWR), Atara Biotherapeutics Inc (NASDAQ:ATRA), Cedar Realty Trust Inc (NYSE:CDR), and Materion Corp (NYSE:MTRN). This group of stocks’ market values are similar to TRNC’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $109 million. That figure was $175 million in TRNC’s case. Radware Ltd. (NASDAQ:RDWR) is the most popular stock in this table. On the other hand Cedar Realty Trust Inc (NYSE:CDR) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks tronc Inc (NASDAQ:TRNC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.