The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have gone over 730 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 28th. In this article we look at what those investors think of John Wiley & Sons Inc (NYSE:JW).
Hedge fund interest in John Wiley & Sons Inc (NYSE:JW) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare JW to other stocks including Cadence Bancorporation (NYSE:CADE), Lions Gate Entertainment Corp. (NYSE:LGF-A), and Spectrum Brands Holdings, Inc. (NYSE:SPB) to get a better sense of its popularity. Our calculations also showed that JW isn’t among the 30 most popular stocks among hedge funds (view video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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.
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 go over the key hedge fund action surrounding John Wiley & Sons Inc (NYSE:JW).
What does smart money think about John Wiley & Sons Inc (NYSE:JW)?
At Q2’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in JW over the last 16 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of John Wiley & Sons Inc (NYSE:JW), with a stake worth $38.4 million reported as of the end of March. Trailing AQR Capital Management was Millennium Management, which amassed a stake valued at $21.3 million. GLG Partners, Renaissance Technologies, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that John Wiley & Sons Inc (NYSE:JW) has experienced falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of money managers that elected to cut their positions entirely heading into Q3. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at close to $0.8 million in stock, and Bruce Kovner’s Caxton Associates LP was right behind this move, as the fund dropped about $0.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as John Wiley & Sons Inc (NYSE:JW) but similarly valued. We will take a look at Cadence Bancorporation (NYSE:CADE), Lions Gate Entertainment Corp. (NYSE:LGF-A), Spectrum Brands Holdings, Inc. (NYSE:SPB), and CRISPR Therapeutics AG (NASDAQ:CRSP). All of these stocks’ market caps are similar to JW’s market cap.
|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 19 hedge funds with bullish positions and the average amount invested in these stocks was $354 million. That figure was $110 million in JW’s case. Spectrum Brands Holdings, Inc. (NYSE:SPB) is the most popular stock in this table. On the other hand CRISPR Therapeutics AG (NASDAQ:CRSP) is the least popular one with only 13 bullish hedge fund positions. John Wiley & Sons Inc (NYSE:JW) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 JW wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); JW investors were disappointed as the stock returned -3.5% 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 so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.