Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hedge Funds Aren’t Crazy About Gray Television, Inc. (GTN) Anymore

At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Gray Television, Inc. (NYSE:GTN) makes for a good investment right now.

Is Gray Television, Inc. (NYSE:GTN) a buy right now? The best stock pickers are taking a pessimistic view. The number of bullish hedge fund positions shrunk by 2 recently. Our calculations also showed that GTN isn’t among the 30 most popular stocks among hedge funds.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.

GAMCO Investors, Mario Gabelli

Let’s review the new hedge fund action encompassing Gray Television, Inc. (NYSE:GTN).

Hedge fund activity in Gray Television, Inc. (NYSE:GTN)

Heading into the fourth quarter of 2018, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GTN over the last 13 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

GTN_dec2018

When looking at the institutional investors followed by Insider Monkey, Anand Desai’s Darsana Capital Partners has the biggest position in Gray Television, Inc. (NYSE:GTN), worth close to $140 million, amounting to 4.4% of its total 13F portfolio. Sitting at the No. 2 spot is Three Bays Capital, managed by Matthew Sidman, which holds a $39 million position; 4.6% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish include Steve Ketchum’s Sound Point Capital, Israel Englander’s Millennium Management and Mario Gabelli’s GAMCO Investors.

Due to the fact that Gray Television, Inc. (NYSE:GTN) has experienced bearish sentiment from the smart money, it’s safe to say that there was a specific group of funds who were dropping their full holdings last quarter. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management sold off the largest investment of the “upper crust” of funds watched by Insider Monkey, worth close to $13.4 million in stock, and Bart Baum’s Ionic Capital Management was right behind this move, as the fund said goodbye to about $2.6 million worth. These moves are interesting, as total hedge fund interest fell by 2 funds last 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 Innoviva, Inc. (NASDAQ:INVA), Mazor Robotics Ltd. (NASDAQ:MZOR), Badger Meter, Inc. (NYSE:BMI), and Criteo SA (NASDAQ:CRTO). This group of stocks’ market values match GTN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
INVA 22 220079 -2
MZOR 8 10500 2
BMI 9 107161 3
CRTO 11 176343 3
Average 12.5 128521 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $129 million. That figure was $262 million in GTN’s case. Innoviva, Inc. (NASDAQ:INVA) is the most popular stock in this table. On the other hand Mazor Robotics Ltd. (NASDAQ:MZOR) is the least popular one with only 8 bullish hedge fund positions. Gray Television, Inc. (NYSE:GTN) 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 INVA might be a better candidate to consider a long position.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.