The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Meredith Corporation (NYSE:MDP) based on those filings.
Meredith Corporation (NYSE:MDP) investors should pay attention to an increase in enthusiasm from smart money in recent months. Meredith Corporation (NYSE:MDP) was in 25 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MDP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s view the new hedge fund action surrounding Meredith Corporation (NYSE:MDP).
Do Hedge Funds Think MDP Is A Good Stock To Buy Now?
At first quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the fourth quarter of 2020. By comparison, 16 hedge funds held shares or bullish call options in MDP a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Ariel Investments held the most valuable stake in Meredith Corporation (NYSE:MDP), which was worth $122.5 million at the end of the fourth quarter. On the second spot was Select Equity Group which amassed $82 million worth of shares. D E Shaw, GAMCO Investors, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ariel Investments allocated the biggest weight to Meredith Corporation (NYSE:MDP), around 1.21% of its 13F portfolio. Scion Asset Management is also relatively very bullish on the stock, dishing out 0.31 percent of its 13F equity portfolio to MDP.
Now, specific money managers were leading the bulls’ herd. Luxor Capital Group, managed by Christian Leone, created the largest position in Meredith Corporation (NYSE:MDP). Luxor Capital Group had $5.9 million invested in the company at the end of the quarter. Michael Burry’s Scion Asset Management also initiated a $4.2 million position during the quarter. The other funds with brand new MDP positions are Frederick DiSanto’s Ancora Advisors, D. E. Shaw’s D E Shaw, and Donald Sussman’s Paloma Partners.
Let’s go over hedge fund activity in other stocks similar to Meredith Corporation (NYSE:MDP). These stocks are Merchants Bancorp (NASDAQ:MBIN), Radware Ltd. (NASDAQ:RDWR), MYR Group Inc (NASDAQ:MYRG), New Mountain Finance Corp. (NASDAQ:NMFC), Atara Biotherapeutics Inc (NASDAQ:ATRA), The Bancorp, Inc. (NASDAQ:TBBK), and iTeos Therapeutics, Inc. (NASDAQ:ITOS). This group of stocks’ market valuations resemble MDP’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $164 million. That figure was $288 million in MDP’s case. Atara Biotherapeutics Inc (NASDAQ:ATRA) is the most popular stock in this table. On the other hand New Mountain Finance Corp. (NASDAQ:NMFC) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Meredith Corporation (NYSE:MDP) is more popular among hedge funds. Our overall hedge fund sentiment score for MDP is 88. 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 returned 24% in 2021 through July 9th but still managed to beat the market by 6.7 percentage points. Hedge funds were also right about betting on MDP as the stock returned 41% since the end of March (through 7/9) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.