A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on The New York Times Company (NYSE:NYT).
Is NYT a good stock to buy now? Hedge funds were betting on the stock. The number of long hedge fund bets moved up by 3 lately. The New York Times Company (NYSE:NYT) was in 45 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 42. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NYT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now we’re going to take a look at the fresh hedge fund action encompassing The New York Times Company (NYSE:NYT).
Do Hedge Funds Think NYT Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in NYT over the last 21 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in The New York Times Company (NYSE:NYT) was held by Darsana Capital Partners, which reported holding $385.1 million worth of stock at the end of September. It was followed by Farallon Capital with a $304.1 million position. Other investors bullish on the company included Renaissance Technologies, SoMa Equity Partners, and Slate Path Capital. In terms of the portfolio weights assigned to each position Darsana Capital Partners allocated the biggest weight to The New York Times Company (NYSE:NYT), around 19.59% of its 13F portfolio. StackLine Partners is also relatively very bullish on the stock, setting aside 11.2 percent of its 13F equity portfolio to NYT.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the biggest position in The New York Times Company (NYSE:NYT). Arrowstreet Capital had $3.5 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $1 million investment in the stock during the quarter. The following funds were also among the new NYT investors: Alec Litowitz and Ross Laser’s Magnetar Capital, Peter Muller’s PDT Partners, and Mika Toikka’s AlphaCrest Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The New York Times Company (NYSE:NYT) but similarly valued. These stocks are Juniper Networks, Inc. (NYSE:JNPR), Five Below Inc (NASDAQ:FIVE), Globant SA (NYSE:GLOB), Williams-Sonoma, Inc. (NYSE:WSM), Penumbra Inc (NYSE:PEN), First Solar, Inc. (NASDAQ:FSLR), and Vereit Inc (NYSE:VER). This group of stocks’ market caps match NYT’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 29.6 hedge funds with bullish positions and the average amount invested in these stocks was $444 million. That figure was $2020 million in NYT’s case. Five Below Inc (NASDAQ:FIVE) is the most popular stock in this table. On the other hand Vereit Inc (NYSE:VER) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks The New York Times Company (NYSE:NYT) is more popular among hedge funds. Our overall hedge fund sentiment score for NYT is 88. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Unfortunately NYT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NYT were disappointed as the stock returned 9.3% since the end of the third quarter (through 12/8) 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.