Nexstar Media Group, Inc. (NXST) Fell Out Of Favor With Hedge Funds

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Nexstar Media Group, Inc. (NASDAQ:NXST).

Nexstar Media Group, Inc. (NASDAQ:NXST) was in 34 hedge funds’ portfolios at the end of June. The all time high for this statistic is 50. NXST has experienced a decrease in activity from the world’s largest hedge funds of late. There were 35 hedge funds in our database with NXST positions at the end of the first quarter. Our calculations also showed that NXST isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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Do Hedge Funds Think NXST Is A Good Stock To Buy Now?

At the end of June, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. By comparison, 42 hedge funds held shares or bullish call options in NXST 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.

Is NXST A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Seth Klarman’s Baupost Group has the most valuable position in Nexstar Media Group, Inc. (NASDAQ:NXST), worth close to $302.6 million, comprising 2.5% of its total 13F portfolio. On Baupost Group’s heels is Amy Minella of Cardinal Capital, with a $167.7 million position; the fund has 4% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish contain Ken Griffin’s Citadel Investment Group, Peter S. Park’s Park West Asset Management and Claus Moller’s P2 Capital Partners. In terms of the portfolio weights assigned to each position Billings Capital Management allocated the biggest weight to Nexstar Media Group, Inc. (NASDAQ:NXST), around 12.56% of its 13F portfolio. Brightline Capital is also relatively very bullish on the stock, designating 7.96 percent of its 13F equity portfolio to NXST.

Because Nexstar Media Group, Inc. (NASDAQ:NXST) has witnessed a decline in interest from the smart money, logic holds that there was a specific group of hedgies that elected to cut their positions entirely last quarter. Interestingly, Jeffrey Jacobowitz’s Simcoe Capital Management cut the biggest investment of all the hedgies watched by Insider Monkey, totaling an estimated $56.9 million in stock, and Ian Simm’s Impax Asset Management was right behind this move, as the fund sold off about $7.7 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Nexstar Media Group, Inc. (NASDAQ:NXST) but similarly valued. These stocks are MINISO Group Holding Limited (NYSE:MNSO), Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN), I-Mab (NASDAQ:IMAB), MDU Resources Group Inc (NYSE:MDU), American Eagle Outfitters Inc. (NYSE:AEO), MP Materials Corp. (NYSE:MP), and Littelfuse, Inc. (NASDAQ:LFUS). This group of stocks’ market caps are similar to NXST’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MNSO 17 185606 5
BHVN 27 666482 -6
IMAB 18 873769 -2
MDU 21 169504 0
AEO 41 1875130 -2
MP 20 2565580 -9
LFUS 27 483266 6
Average 24.4 974191 -1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $974 million. That figure was $973 million in NXST’s case. American Eagle Outfitters Inc. (NYSE:AEO) is the most popular stock in this table. On the other hand MINISO Group Holding Limited (NYSE:MNSO) is the least popular one with only 17 bullish hedge fund positions. Nexstar Media Group, Inc. (NASDAQ:NXST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NXST is 59.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on NXST as the stock returned 4% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Follow Nexstar Media Group Inc. (NASDAQ:NXST)

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