Cumulus Media Inc (NASDAQ:CMLS) has experienced a decrease in support from the world’s most elite money managers lately.
To the average investor, there are plenty of gauges market participants can use to watch Mr. Market. Two of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the market by a solid amount (see just how much).
Equally as key, optimistic insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are plenty of reasons for a bullish insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this method if you know what to do (learn more here).
With these “truths” under our belt, we’re going to take a glance at the key action encompassing Cumulus Media Inc (NASDAQ:CMLS).
How are hedge funds trading Cumulus Media Inc (NASDAQ:CMLS)?
At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of -7% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors had the largest position in Cumulus Media Inc (NASDAQ:CMLS), worth close to $69 million, comprising 9.7% of its total 13F portfolio. The second largest stake is held by Howard Marks of Oaktree Capital Management, with a $11 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Wallace Weitz’s Wallace R. Weitz & Co., John Kleinheinz’s Kleinheinz Capital Partners and Geoffrey Raynor’s Q Investments (Specter Holdings).
Because Cumulus Media Inc (NASDAQ:CMLS) has experienced falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers that decided to sell off their full holdings in Q4. Intriguingly, Rehan Jaffer’s H Partners Management sold off the largest stake of the “upper crust” of funds we track, totaling about $2 million in stock., and David Costen Haley of HBK Investments was right behind this move, as the fund dumped about $0 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds in Q4.
Insider trading activity in Cumulus Media Inc (NASDAQ:CMLS)
Insider purchases made by high-level executives is most useful when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time frame, Cumulus Media Inc (NASDAQ:CMLS) has seen 2 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Cumulus Media Inc (NASDAQ:CMLS). These stocks are Beasley Broadcast Group Inc (NASDAQ:BBGI), Pandora Media Inc (NYSE:P), Salem Communications Corp (NASDAQ:SALM), Saga Communications, Inc. (NYSEAMEX:SGA), and Entercom Communications Corp. (NYSE:ETM). All of these stocks are in the broadcasting – radio industry and their market caps are similar to CMLS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Beasley Broadcast Group Inc (NASDAQ:BBGI)||1||0||0|
|Pandora Media Inc (NYSE:P)||14||0||9|
|Salem Communications Corp (NASDAQ:SALM)||3||0||2|
|Saga Communications, Inc. (NYSEAMEX:SGA)||2||0||1|
|Entercom Communications Corp. (NYSE:ETM)||3||0||0|
With the results shown by Insider Monkey’s time-tested strategies, retail investors must always watch hedge fund and insider trading sentiment, and Cumulus Media Inc (NASDAQ:CMLS) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.