Here is What Hedge Funds Think About Gray Television, Inc. (GTN)

We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Gray Television, Inc. (NYSE:GTN) based on that data.

Gray Television, Inc. (NYSE:GTN) investors should pay attention to a decrease in support from the world’s most elite money managers lately. Gray Television, Inc. (NYSE:GTN) was in 25 hedge funds’ portfolios at the end of March. The all time high for this statistic is 29. Our calculations also showed that GTN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

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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. Now we’re going to analyze the latest hedge fund action surrounding Gray Television, Inc. (NYSE:GTN).

Do Hedge Funds Think GTN Is A Good Stock To Buy Now?

At the end of March, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in GTN a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

The largest stake in Gray Television, Inc. (NYSE:GTN) was held by Darsana Capital Partners, which reported holding $66.4 million worth of stock at the end of December. It was followed by Arrowstreet Capital with a $21.1 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and GAMCO Investors. In terms of the portfolio weights assigned to each position Cumberland Associates / Springowl Associates allocated the biggest weight to Gray Television, Inc. (NYSE:GTN), around 4.12% of its 13F portfolio. Sound Point Capital is also relatively very bullish on the stock, setting aside 3.35 percent of its 13F equity portfolio to GTN.

Because Gray Television, Inc. (NYSE:GTN) has witnessed declining sentiment from the smart money, we can see that there lies a certain “tier” of hedge funds who sold off their positions entirely last quarter. At the top of the heap, Dan Rasmussen’s Verdad Advisers cut the largest position of the “upper crust” of funds tracked by Insider Monkey, valued at close to $2.5 million in stock, and Felix Wai’s Zeno Research was right behind this move, as the fund dumped about $1.3 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Gray Television, Inc. (NYSE:GTN) but similarly valued. These stocks are Lithium Americas Corp. (NYSE:LAC), ImmunoGen, Inc. (NASDAQ:IMGN), BrightSphere Investment Group Inc (NYSE:BSIG), New Frontier Health Corporation (NYSE:NFH), Veritex Holdings Inc (NASDAQ:VBTX), YPF Sociedad Anonima (NYSE:YPF), and Methode Electronics Inc. (NYSE:MEI). All of these stocks’ market caps match GTN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LAC 10 49166 -2
IMGN 26 457651 1
BSIG 26 642021 0
NFH 13 310954 1
VBTX 6 38738 -1
YPF 8 9228 2
MEI 13 80123 2
Average 14.6 226840 0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $152 million in GTN’s case. ImmunoGen, Inc. (NASDAQ:IMGN) is the most popular stock in this table. On the other hand Veritex Holdings Inc (NASDAQ:VBTX) is the least popular one with only 6 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. Our overall hedge fund sentiment score for GTN is 76.4. 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 gained 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on GTN as the stock returned 22.9% since the end of Q1 (through 7/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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