Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Scripps Networks Interactive, Inc. (NYSE:SNI).
Scripps Networks Interactive, Inc. (NYSE:SNI) has experienced a decrease in support from the world’s most elite money managers in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Manpowergroup Inc (NYSE:MAN), Ingredion Inc (NYSE:INGR), and NVR, Inc. (NYSE:NVR) to gather more data points.
Follow Scripps Networks Interactive Inc. (NYSE:SNI)
Follow Scripps Networks Interactive Inc. (NYSE:SNI)
In the 21st-century investor’s toolkit, there are a lot of formulas market participants use to evaluate stocks. Some of the most under-the-radar formulas are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top investment managers can beat the S&P 500 by a significant amount (see the details here).
With all of this in mind, we’re going to analyze the new action encompassing Scripps Networks Interactive, Inc. (NYSE:SNI).
How have hedgies been trading Scripps Networks Interactive, Inc. (NYSE:SNI)?
At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the second quarter. With the smart money’s capital changing hands, there exist a few key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Southeastern Asset Management, managed by Mason Hawkins, holds the number one position in Scripps Networks Interactive, Inc. (NYSE:SNI). Southeastern Asset Management has a $650.9 million position in the stock, comprising 5.5% of its 13F portfolio. On Southeastern Asset Management’s heels is Tom Russo of Gardner Russo & Gardner, with a $61.3 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions comprise Mario Gabelli’s GAMCO Investors, Joel Greenblatt’s Gotham Asset Management and Jim Simons’s Renaissance Technologies.
Because Scripps Networks Interactive, Inc. (NYSE:SNI) has experienced falling interest from the smart money, it’s safe to say that there lies a certain “tier” of hedgies that decided to sell off their entire stakes in the third quarter. It’s worth mentioning that Jeffrey Gates’s Gates Capital Management dropped the biggest stake of the 700 funds followed by Insider Monkey, valued at close to $38.3 million in stock. Robert Joseph Caruso’s fund, Select Equity Group, also said goodbye to its stock, about $33.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 4 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Scripps Networks Interactive, Inc. (NYSE:SNI). We will take a look at Manpowergroup Inc (NYSE:MAN), Ingredion Inc (NYSE:INGR), NVR, Inc. (NYSE:NVR), and TECO Energy, Inc. (NYSE:TE). All of these stocks’ market caps resemble SNI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MAN | 25 | 862877 | -1 |
| INGR | 23 | 203036 | 1 |
| NVR | 21 | 790611 | -2 |
| TE | 20 | 175421 | 9 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $508 million. That figure was $948 million in SNI’s case. Manpowergroup Inc (NYSE:MAN) is the most popular stock in this table. On the other hand TECO Energy, Inc. (NYSE:TE) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Scripps Networks Interactive, Inc. (NYSE:SNI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, this stock might represent a good buying opportunity at the moment. It might be a good idea to analyze it in detail and potentially include it in your portfolio.
