Hedge Funds Are Crazy About Tegna Inc (TGNA)

How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Tegna Inc (NYSE:TGNA).

Tegna Inc (NYSE:TGNA) shareholders have witnessed an increase in hedge fund sentiment in recent months. Tegna Inc (NYSE:TGNA) was in 37 hedge funds’ portfolios at the end of September. The all time high for this statistic is 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TGNA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to take a peek at the latest hedge fund action encompassing Tegna Inc (NYSE:TGNA).

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Steven Tananbaum of GoldenTree Asset Management

Do Hedge Funds Think TGNA Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 106% from the second quarter of 2021. On the other hand, there were a total of 27 hedge funds with a bullish position in TGNA a year ago. So, let’s review 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, Ariel Investments, managed by John W. Rogers, holds the number one position in Tegna Inc (NYSE:TGNA). Ariel Investments has a $163.3 million position in the stock, comprising 1.5% of its 13F portfolio. The second most bullish fund manager is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $34.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Carl Tiedemann and Michael Tiedemann’s TIG Advisors. In terms of the portfolio weights assigned to each position Alden Global Capital allocated the biggest weight to Tegna Inc (NYSE:TGNA), around 12.59% of its 13F portfolio. Harbert Management is also relatively very bullish on the stock, dishing out 7 percent of its 13F equity portfolio to TGNA.

Consequently, key money managers were leading the bulls’ herd. TIG Advisors, managed by Carl Tiedemann and Michael Tiedemann, established the most valuable position in Tegna Inc (NYSE:TGNA). TIG Advisors had $20 million invested in the company at the end of the quarter. Raymond J. Harbert’s Harbert Management also made a $19.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Steven Tananbaum’s GoldenTree Asset Management, Eli Samaha’s Madison Avenue Partners, and Chuck Royce’s Royce & Associates.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tegna Inc (NYSE:TGNA) but similarly valued. We will take a look at Coursera, Inc. (NYSE:COUR), American Eagle Outfitters Inc. (NYSE:AEO), Ortho Clinical Diagnostics Holdings plc (NASDAQ:OCDX), Fisker Inc. (NYSE:FSR), Qualys Inc (NASDAQ:QLYS), Healthcare Realty Trust Inc (NYSE:HR), and Arvinas, Inc. (NASDAQ:ARVN). This group of stocks’ market caps resemble TGNA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
COUR 25 173727 14
AEO 24 1208509 -17
OCDX 30 272834 9
FSR 15 228103 -1
QLYS 18 220919 -2
HR 18 210905 -1
ARVN 25 312887 -1
Average 22.1 375412 0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $375 million. That figure was $420 million in TGNA’s case. Ortho Clinical Diagnostics Holdings plc (NASDAQ:OCDX) is the most popular stock in this table. On the other hand Fisker Inc. (NYSE:FSR) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Tegna Inc (NYSE:TGNA) is more popular among hedge funds. Our overall hedge fund sentiment score for TGNA 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately TGNA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TGNA were disappointed as the stock returned 0.2% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 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.