The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Townsquare Media Inc (NYSE:TSQ) based on those filings.
Townsquare Media Inc (NYSE:TSQ) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that TSQ 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). At the end of this article we will also compare TSQ to other stocks including Luby’s, Inc. (NYSE:LUB), Pacific Mercantile Bancorp (NASDAQ:PMBC), and Sachem Capital Corp. (NYSE:SACH) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a 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 view the key hedge fund action encompassing Townsquare Media Inc (NYSE:TSQ).
Hedge fund activity in Townsquare Media Inc (NYSE:TSQ)
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in TSQ a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, MSD Capital was the largest shareholder of Townsquare Media Inc (NYSE:TSQ), with a stake worth $7.6 million reported as of the end of September. Trailing MSD Capital was Oaktree Capital Management, which amassed a stake valued at $7.4 million. Renaissance Technologies, GAMCO Investors, 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 MSD Capital allocated the biggest weight to Townsquare Media Inc (NYSE:TSQ), around 15.69% of its 13F portfolio. Oaktree Capital Management is also relatively very bullish on the stock, dishing out 0.16 percent of its 13F equity portfolio to TSQ.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks similar to Townsquare Media Inc (NYSE:TSQ). These stocks are Luby’s, Inc. (NYSE:LUB), Pacific Mercantile Bancorp (NASDAQ:PMBC), Sachem Capital Corp. (NYSE:SACH), BG Staffing Inc (NYSE:BGSF), Immutep Limited (NASDAQ:IMMP), Borr Drilling Limited (NYSE:BORR), and OP Bancorp (NASDAQ:OPBK). This group of stocks’ market values are closest to TSQ’s market value.
|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 4.4 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $19 million in TSQ’s case. BG Staffing Inc (NYSE:BGSF) is the most popular stock in this table. On the other hand Sachem Capital Corp. (NYSE:SACH) is the least popular one with only 1 bullish hedge fund positions. Townsquare Media Inc (NYSE:TSQ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TSQ is 52.7. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on TSQ as the stock returned 33.7% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.