Entravision Communications shares were off nearly 16% in midday trading yesterday, before closing down 13.2%, to $5.60.
It’s another unfortunate dip for a stock that had been at $7 on New Year’s Eve, and at nearly $8 a share in early August 2016.
What’s the reason for the high volume of sell activity?
Blame it on the FCC’s incentive auction, which is set to enter Stage 4 of the Forward Auction at 10 a.m. Wednesday (1/18).
Wedbush on Tuesday morning downgraded Entravision from “Outperform” to “Neutral,” and in doing so reduced its price target from $9 to $7.
Explaining the downgrade, Wedbush Securities Analyst James Dix said, “Our lower valuation reflects a lower-than-expected stage 4 FCC spectrum reverse auction result, which was announced on Friday.” This was partially offset, he added, by a higher valuation applied to Entravision’s core business for “potential deregulation’s impact on industry valuations.”
This suggests that a new FCC will be good for media businesses in the long term, and that the spectrum auction may be the last disappointment of a Wheeler FCC that saw an unsuccessful attempt to introduce a new set-top box for cable TV subscribers.
As noted by American Banking and Market News, a number of hedge funds have recently bought and sold shares of Entravision. Price T Rowe Associates Inc. MD acquired a new stake in Entravision during Q3, valued at approximately $156,000. At the same time, Gotham Asset Management LLC acquired a new stake in Entravision during Q3, valued at approximately $127,000.
Meanwhile, The Manufacturers Life Insurance Company acquired a new stake in Entravision during the quarter, and that’s valued at approximately $357,000.
But the biggest institutional investment in Entravision during Q3 is represented by Two Sigma Advisers LP. It boosted its stake in Entravision by 21.5% and now owns 69,000 shares of the company’s stock, valued at $526,000, after purchasing an additional 12,200 shares in the last quarter.
ABMN also notes that SECOR Capital Advisors LP boosted its stake in Entravision by 13% in the third quarter. SECOR Capital Advisors LP now owns 147,559 shares of the company’s stock, valued at $1,126,000, after buying an additional 16,971 shares in the last quarter.
Hedge funds and other institutional investors own 60.27% of the company’s stock.
Entravision focuses on the U.S. Hispanic market and, in addition to its radio stations, is the largest affiliate partner of the Univision and UniMás networks.
