At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31. In this article, we will use that wealth of knowledge to determine whether or not John Wiley & Sons Inc (NYSE:JW) makes for a good investment right now.
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 Kosmos Energy Ltd (NYSE:KOS), International Bancshares Corp (NASDAQ:IBOC), and Meredith Corporation (NYSE:MDP) to get a better sense of its popularity.
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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a gander at the latest hedge fund action encompassing John Wiley & Sons Inc (NYSE:JW).
What have hedge funds been doing with John Wiley & Sons Inc (NYSE:JW)?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in JW a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
The largest stake in John Wiley & Sons Inc (NYSE:JW) was held by AQR Capital Management, which reported holding $38.7 million worth of stock at the end of March. It was followed by GLG Partners with a $9.6 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and Citadel Investment Group.
Seeing as John Wiley & Sons Inc (NYSE:JW) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies who sold off their full holdings by the end of the third quarter. It’s worth mentioning that Ray Dalio’s Bridgewater Associates said goodbye to the largest position of all the hedgies monitored by Insider Monkey, comprising about $1.4 million in stock. Minhua Zhang’s fund, Weld Capital Management, also dropped its stock, about $0.4 million worth. These moves are important to note, 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 similar to John Wiley & Sons Inc (NYSE:JW). We will take a look at Kosmos Energy Ltd (NYSE:KOS), International Bancshares Corp (NASDAQ:IBOC), Meredith Corporation (NYSE:MDP), and First Bancorp (NYSE:FBP). This group of 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 |
|---|---|---|---|
| KOS | 18 | 118384 | 4 |
| IBOC | 14 | 151399 | -5 |
| MDP | 11 | 294686 | -1 |
| FBP | 18 | 246590 | -2 |
| Average | 15.25 | 202765 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $203 million. That figure was $78 million in JW’s case. Kosmos Energy Ltd (NYSE:KOS) is the most popular stock in this table. On the other hand Meredith Corporation (NYSE:MDP) is the least popular one with only 11 bullish hedge fund positions. John Wiley & Sons Inc (NYSE:JW) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on JW, though not to the same extent, as the stock returned 4.8% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
