Is News Corp (NASDAQ:NWS) a sell?
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Just as necessary, bullish insider trading sentiment is a second way to look at the stock market universe. Just as you’d expect, there are many incentives for a corporate insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this tactic if “monkeys” know what to do (learn more here).
What’s more, let’s analyze the latest info for News Corp (NASDAQ:NWS).
Hedge fund activity in News Corp (NASDAQ:NWS)
In preparation for the third quarter, a total of 20 of the hedge funds we track held long positions in this stock, a change of -23% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly.
Out of the hedge funds we follow, Elliott Management, managed by Paul Singer, holds the biggest position in News Corp (NASDAQ:NWS). Elliott Management has a $331.2 million position in the stock, comprising 6.4% of its 13F portfolio. Sitting at the No. 2 spot is Michael Hintze of CQS Cayman LP, with a $142.4 million position; 20.7% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Panayotis Sparaggis’s Alkeon Capital Management, William Duhamel’s Route One Investment Company and Boykin Curry’s Eagle Capital Management.
Because News Corp (NASDAQ:NWS) has faced bearish sentiment from the top-tier hedge fund industry, we can see that there exists a select few hedgies who were dropping their entire stakes last quarter. It’s worth mentioning that D. E. Shaw’s D E Shaw dumped the biggest stake of all the hedgies we track, comprising about $146.1 million in stock. Seth Klarman’s fund, Baupost Group, also sold off its stock, about $124.5 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 6 funds last quarter.
How are insiders trading News Corp (NASDAQ:NWS)?
Legal insider trading, particularly when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, News Corp (NASDAQ:NWS) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to News Corp (NASDAQ:NWS). These stocks are Live Nation Entertainment, Inc. (NYSE:LYV), Starz (NASDAQ:STRZA), The Madison Square Garden Co (NASDAQ:MSG), The Walt Disney Company (NYSE:DIS), and Time Warner Inc (NYSE:TWX). This group of stocks belong to the entertainment – diversified industry and their market caps match NWS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Live Nation Entertainment, Inc. (NYSE:LYV)||26||0||0|
|The Madison Square Garden Co (NASDAQ:MSG)||35||0||0|
|The Walt Disney Company (NYSE:DIS)||51||0||0|
|Time Warner Inc (NYSE:TWX)||55||0||0|
Using the returns explained by our strategies, regular investors must always keep one eye on hedge fund and insider trading sentiment, and News Corp (NASDAQ:NWS) is an important part of this process.