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Is Gray Television, Inc. (GTN) Going to Burn These Hedge Funds?

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Is Gray Television, Inc. (NYSE:GTN) worth your attention right now? Money managers are getting more bullish. The number of long hedge fund bets improved by 7 recently.

In the eyes of most shareholders, hedge funds are viewed as underperforming, old investment tools of years past. While there are greater than 8000 funds with their doors open at present, we hone in on the crème de la crème of this club, about 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total capital, and by watching their top picks, we have unsheathed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

02 Jamie Zimmerman

Just as key, bullish insider trading sentiment is another way to break down the stock market universe. There are a variety of reasons for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).

With all of this in mind, it’s important to take a gander at the recent action encompassing Gray Television, Inc. (NYSE:GTN).

What have hedge funds been doing with Gray Television, Inc. (NYSE:GTN)?

In preparation for this quarter, a total of 17 of the hedge funds we track were bullish in this stock, a change of 70% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, Litespeed Management, managed by Jamie Zimmerman, holds the largest position in Gray Television, Inc. (NYSE:GTN). Litespeed Management has a $20.2 million position in the stock, comprising 4% of its 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $5.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Abby Flamholz and Yehuda Blinder’s ADAR Investment Management, Edward A. Mule’s Silver Point Capital and Eric Semler’s TCS Capital Management.

Now, some big names have been driving this bullishness. TCS Capital Management, managed by Eric Semler, assembled the biggest position in Gray Television, Inc. (NYSE:GTN). TCS Capital Management had 1.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.7 million position during the quarter. The other funds with brand new GTN positions are Jim Simons’s Renaissance Technologies, Neil Chriss’s Hutchin Hill Capital, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

What have insiders been doing with Gray Television, Inc. (NYSE:GTN)?

Bullish insider trading is best served when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, Gray Television, Inc. (NYSE:GTN) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Gray Television, Inc. (NYSE:GTN). These stocks are Nexstar Broadcasting Group, Inc. (NASDAQ:NXST), Fisher Communications, Inc. (NASDAQ:FSCI), Central European Media Enterprises Ltd. (NASDAQ:CETV), Outdoor Channel Holdings, Inc. (NASDAQ:OUTD), and Entravision Communication (NYSE:EVC). This group of stocks are the members of the broadcasting – tv industry and their market caps are closest to GTN’s market cap.

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