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Hedge Funds Are Selling Gray Television, Inc. (GTN)

After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 28. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Gray Television, Inc. (NYSE:GTN).

Gray Television, Inc. (NYSE:GTN) has seen a decrease in hedge fund interest in recent months. GTN was in 25 hedge funds’ portfolios at the end of the second quarter of 2019. There were 27 hedge funds in our database with GTN holdings at the end of the previous quarter. Our calculations also showed that GTN isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? 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 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

GAMCO Investors, Mario Gabelli

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to check out the recent hedge fund action surrounding Gray Television, Inc. (NYSE:GTN).

How are hedge funds trading Gray Television, Inc. (NYSE:GTN)?

At Q2’s end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GTN over the last 16 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with GTN Positions

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Darsana Capital Partners, managed by Anand Desai, holds the number one position in Gray Television, Inc. (NYSE:GTN). Darsana Capital Partners has a $147.5 million position in the stock, comprising 4.8% of its 13F portfolio. The second most bullish fund manager is of Renaissance Technologies, with a $12.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions consist of Mario Gabelli’s GAMCO Investors, Cliff Asness’s AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Judging by the fact that Gray Television, Inc. (NYSE:GTN) has experienced bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds who sold off their positions entirely in the second quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the largest stake of the “upper crust” of funds monitored by Insider Monkey, comprising close to $7.6 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund cut about $1.5 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds in the second quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Gray Television, Inc. (NYSE:GTN) but similarly valued. We will take a look at Kontoor Brands, Inc. (NYSE:KTB), Cision Ltd. (NYSE:CISN), Saia Inc (NASDAQ:SAIA), and Alexander & Baldwin Inc (NYSE:ALEX). This group of stocks’ market valuations are closest to GTN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KTB 13 106850 13
CISN 21 102631 4
SAIA 9 63027 -5
ALEX 10 24038 5
Average 13.25 74137 4.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $219 million in GTN’s case. Cision Ltd. (NYSE:CISN) is the most popular stock in this table. On the other hand Saia Inc (NASDAQ:SAIA) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Gray Television, Inc. (NYSE:GTN) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately GTN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GTN were disappointed as the stock returned -0.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.

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

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