Should You Buy The New York Times Company (NYT)?

Is The New York Times Company (NYSE:NYT) undervalued? Prominent investors are in a bullish mood. The number of bullish hedge fund positions moved up by 1 recently.

To the average investor, there are plenty of indicators investors can use to track their holdings. Two of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can outperform the broader indices by a healthy amount (see just how much).

The New York Times Company (NYSE:NYT)

Just as integral, optimistic insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are a variety of incentives for an executive to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this method if shareholders know what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the latest action surrounding The New York Times Company (NYSE:NYT).

How are hedge funds trading The New York Times Company (NYSE:NYT)?

At year’s end, a total of 14 of the hedge funds we track were bullish in this stock, a change of 8% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly.

When looking at the hedgies we track, Irving Kahn’s Kahn Brothers had the largest position in The New York Times Company (NYSE:NYT), worth close to $41 million, accounting for 7.1% of its total 13F portfolio. On Kahn Brothers’s heels is Ken Griffin of Citadel Investment Group, with a $35 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Larry Foley and Paul Farrell’s Bronson Point Partners, Chuck Royce’s Royce & Associates and Glenn Russell Dubin’s Highbridge Capital Management.

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Bronson Point Partners, managed by Larry Foley and Paul Farrell, assembled the most outsized position in The New York Times Company (NYSE:NYT). Bronson Point Partners had 12 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $4 million investment in the stock during the quarter. The other funds with new positions in the stock are James H. Litinsk’s JHL Capital Group and Steven Cohen’s SAC Capital Advisors.

Insider trading activity in The New York Times Company (NYSE:NYT)

Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past six months. Over the last six-month time frame, The New York Times Company (NYSE:NYT) has seen 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
The McClatchy Company (NYSE:MNI) 11 0 1
Journal Communications, Inc. (NYSE:JRN) 11 0 2
Gannett Co., Inc. (NYSE:GCI) 21 0 8
The E.W. Scripps Company (NYSE:SSP) 15 0 7

With the results shown by our time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and The New York Times Company (NYSE:NYT) is an important part of this process.

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Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

Related tickers: The McClatchy Company (NYSE:MNI), Journal Communications, Inc. (NYSE:JRN), Gannett Co., Inc. (NYSE:GCI), The E.W. Scripps Company (NYSE:SSP)