Is MSG Networks Inc (MSGN) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and successful investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of MSG Networks Inc (NYSE:MSGN) based on that data.

Is MSG Networks Inc (NYSE:MSGN) undervalued? The smart money is getting more optimistic. The number of bullish hedge fund positions inched up by 1 lately. Our calculations also showed that msgn isn’t among the 30 most popular stocks among hedge funds. MSGN was in 21 hedge funds’ portfolios at the end of March. There were 20 hedge funds in our database with MSGN holdings at the end of the previous quarter.

Why do we pay any attention at all to hedge fund sentiment? 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.

Mario Gabelli

Let’s take a gander at the latest hedge fund action encompassing MSG Networks Inc (NYSE:MSGN).

How are hedge funds trading MSG Networks Inc (NYSE:MSGN)?

Heading into the second quarter of 2019, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the fourth quarter of 2018. On the other hand, there were a total of 24 hedge funds with a bullish position in MSGN a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with MSGN Positions

Among these funds, Ariel Investments held the most valuable stake in MSG Networks Inc (NYSE:MSGN), which was worth $147.5 million at the end of the first quarter. On the second spot was GAMCO Investors which amassed $43.3 million worth of shares. Moreover, Arrowstreet Capital, GLG Partners, and Millennium Management were also bullish on MSG Networks Inc (NYSE:MSGN), allocating a large percentage of their portfolios to this stock.

As one would reasonably expect, key hedge funds were leading the bulls’ herd. Hudson Bay Capital Management, managed by Sander Gerber, created the biggest position in MSG Networks Inc (NYSE:MSGN). Hudson Bay Capital Management had $3.6 million invested in the company at the end of the quarter. Roy Vermus and Shlomi Bracha’s Noked Capital also made a $3 million investment in the stock during the quarter. The other funds with brand new MSGN positions are James Thomas Berylson’s Berylson Capital Partners, Dipak Patel’s Alight Capital, and Ken Griffin’s Citadel Investment Group.

Let’s check out hedge fund activity in other stocks similar to MSG Networks Inc (NYSE:MSGN). We will take a look at Atrion Corporation (NASDAQ:ATRI), Kaman Corporation (NYSE:KAMN), Tricida, Inc. (NASDAQ:TCDA), and Kronos Worldwide, Inc. (NYSE:KRO). This group of stocks’ market caps resemble MSGN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATRI 8 92684 -2
KAMN 12 223634 0
TCDA 14 682740 1
KRO 13 44485 -1
Average 11.75 260886 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $261 million. That figure was $261 million in MSGN’s case. Tricida, Inc. (NASDAQ:TCDA) is the most popular stock in this table. On the other hand Atrion Corporation (NASDAQ:ATRI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks MSG Networks Inc (NYSE:MSGN) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately MSGN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MSGN were disappointed as the stock returned -4.7% during the same period 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 13 of these stocks already outperformed the market in Q2.

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