Hedge Funds Are Selling Entravision Communication Corporation (EVC)

Is Entravision Communication Corporation (NYSE:EVC) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.

Entravision Communication Corporation (NYSE:EVC) has seen a decrease in activity from the world’s largest hedge funds of late. EVC was in 15 hedge funds’ portfolios at the end of the third quarter of 2018. There were 16 hedge funds in our database with EVC holdings at the end of the previous quarter. Our calculations also showed that evc isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Chuck Royce

We’re going to check out the key hedge fund action regarding Entravision Communication Corporation (NYSE:EVC).

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

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. On the other hand, there were a total of 23 hedge funds with a bullish position in EVC at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with EVC Positions

The largest stake in Entravision Communication Corporation (NYSE:EVC) was held by AQR Capital Management, which reported holding $13.4 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $6 million position. Other investors bullish on the company included D E Shaw, Two Sigma Advisors, and Royce & Associates.

Because Entravision Communication Corporation (NYSE:EVC) has experienced bearish sentiment from the smart money, we can see that there lies a certain “tier” of fund managers who sold off their entire stakes heading into Q3. Interestingly, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital said goodbye to the biggest stake of the 700 funds tracked by Insider Monkey, comprising an estimated $1.9 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund said goodbye to about $0.2 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds heading into Q3.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Entravision Communication Corporation (NYSE:EVC) but similarly valued. We will take a look at Envirostar Inc (NYSE:EVI), Bristow Group Inc (NYSE:BRS), Perry Ellis International, Inc. (NASDAQ:PERY), and NN, Inc. (NASDAQ:NNBR). This group of stocks’ market caps match EVC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EVI 2 2746 1
BRS 10 128112 -1
PERY 8 35015 -3
NNBR 14 75795 6
Average 8.5 60417 0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $31 million in EVC’s case. NN, Inc. (NASDAQ:NNBR) is the most popular stock in this table. On the other hand Envirostar Inc (NYSE:EVI) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Entravision Communication Corporation (NYSE:EVC) 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.

Disclosure: None. This article was originally published at Insider Monkey.