Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of The E.W. Scripps Company (NASDAQ:SSP).
Is SSP a good stock to buy now? The E.W. Scripps Company (NASDAQ:SSP) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds’ portfolios at the end of September. Our calculations also showed that SSP 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). 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 Heska Corp (NASDAQ:HSKA), e.l.f. Beauty, Inc. (NYSE:ELF), and Replimune Group, Inc. (NASDAQ:REPL) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Keeping this in mind let’s take a look at the new hedge fund action regarding The E.W. Scripps Company (NASDAQ:SSP).
Do Hedge Funds Think SSP Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. On the other hand, there were a total of 17 hedge funds with a bullish position in SSP a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, GAMCO Investors was the largest shareholder of The E.W. Scripps Company (NASDAQ:SSP), with a stake worth $54.8 million reported as of the end of September. Trailing GAMCO Investors was Cove Street Capital, which amassed a stake valued at $22.7 million. Minerva Advisors, Litespeed Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Litespeed Management allocated the biggest weight to The E.W. Scripps Company (NASDAQ:SSP), around 8.53% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, setting aside 4.59 percent of its 13F equity portfolio to SSP.
Because The E.W. Scripps Company (NASDAQ:SSP) has experienced a decline in interest from hedge fund managers, logic holds that there lies a certain “tier” of funds that decided to sell off their entire stakes heading into Q4. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the biggest stake of the 750 funds monitored by Insider Monkey, worth an estimated $0.9 million in stock. Paul Hondros’s fund, AlphaOne Capital Partners, also dropped its stock, about $0.3 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 go over hedge fund activity in other stocks similar to The E.W. Scripps Company (NASDAQ:SSP). These stocks are Heska Corp (NASDAQ:HSKA), e.l.f. Beauty, Inc. (NYSE:ELF), Replimune Group, Inc. (NASDAQ:REPL), Arvinas, Inc. (NASDAQ:ARVN), BioLife Solutions, Inc. (NASDAQ:BLFS), New Mountain Finance Corp. (NASDAQ:NMFC), and City Holding Company (NASDAQ:CHCO). All of these stocks’ market caps are similar to SSP’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 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $146 million. That figure was $98 million in SSP’s case. Arvinas, Inc. (NASDAQ:ARVN) is the most popular stock in this table. On the other hand City Holding Company (NASDAQ:CHCO) is the least popular one with only 6 bullish hedge fund positions. The E.W. Scripps Company (NASDAQ:SSP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SSP is 41.8. 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. A small number of hedge funds were also right about betting on SSP as the stock returned 22.5% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.