Is Outfront Media Inc. (REIT) (OUT) A Good Stock To Buy?

·6 min read

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Outfront Media Inc. (REIT) (NYSE:OUT) for your portfolio? We'll look to this invaluable collective wisdom for the answer.

Is OUT a good stock to buy? Prominent investors were taking a pessimistic view. The number of bullish hedge fund bets fell by 10 in recent months. Outfront Media Inc. (REIT) (NYSE:OUT) was in 31 hedge funds' portfolios at the end of June. The all time high for this statistic is 41. Our calculations also showed that OUT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 41 hedge funds in our database with OUT positions at the end of the first quarter.

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Jeffrey Tannenbaum of Fir Tree

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

At second quarter's end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -24% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OUT over the last 24 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

The largest stake in Outfront Media Inc. (REIT) (NYSE:OUT) was held by Citadel Investment Group, which reported holding $82.1 million worth of stock at the end of June. It was followed by P2 Capital Partners with a $78.2 million position. Other investors bullish on the company included Fir Tree, Hawk Ridge Management, and EMS Capital. In terms of the portfolio weights assigned to each position P2 Capital Partners allocated the biggest weight to Outfront Media Inc. (REIT) (NYSE:OUT), around 5.87% of its 13F portfolio. Nishkama Capital is also relatively very bullish on the stock, earmarking 4.95 percent of its 13F equity portfolio to OUT.

Seeing as Outfront Media Inc. (REIT) (NYSE:OUT) has faced declining sentiment from the entirety of the hedge funds we track, it's safe to say that there were a few funds who sold off their full holdings heading into Q3. Interestingly, Richard Mashaal's Rima Senvest Management sold off the biggest investment of the "upper crust" of funds tracked by Insider Monkey, worth close to $68.1 million in stock. John Smith Clark's fund, Southpoint Capital Advisors, also cut its stock, about $32.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 10 funds heading into Q3.

Let's go over hedge fund activity in other stocks similar to Outfront Media Inc. (REIT) (NYSE:OUT). These stocks are The Simply Good Foods Company (NASDAQ:SMPL), Insperity Inc (NYSE:NSP), Moelis & Company (NYSE:MC), Allegiant Travel Company (NASDAQ:ALGT), Chimera Investment Corporation (NYSE:CIM), Navient Corp (NASDAQ:NAVI), and Bandwidth Inc. (NASDAQ:BAND). This group of stocks' market valuations match OUT's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SMPL,17,212669,-5 NSP,20,220013,0 MC,18,146026,-1 ALGT,29,390264,7 CIM,16,105209,1 NAVI,17,204809,-6 BAND,21,237541,-3 Average,19.7,216647,-1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.7 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $702 million in OUT's case. Allegiant Travel Company (NASDAQ:ALGT) is the most popular stock in this table. On the other hand Chimera Investment Corporation (NYSE:CIM) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Outfront Media Inc. (REIT) (NYSE:OUT) is more popular among hedge funds. Our overall hedge fund sentiment score for OUT is 67.7. 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 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 returned 24.9% in 2021 through October 15th but still managed to beat the market by 4.5 percentage points. Hedge funds were also right about betting on OUT as the stock returned 9.5% since the end of June (through 10/15) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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

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