Did Hedge Funds Catch A Break With Qurate Retail, Inc. (QRTEA)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Qurate Retail, Inc. (NASDAQ:QRTEA) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

Qurate Retail, Inc. (NASDAQ:QRTEA) has seen a decrease in hedge fund interest recently. Qurate Retail, Inc. (NASDAQ:QRTEA) was in 34 hedge funds’ portfolios at the end of September. The all time high for this statistic is 43. There were 39 hedge funds in our database with QRTEA positions at the end of the second quarter. Our calculations also showed that QRTEA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a look at the fresh hedge fund action regarding Qurate Retail, Inc. (NASDAQ:QRTEA).

Andrew Raab of FPR Partners

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

At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. On the other hand, there were a total of 41 hedge funds with a bullish position in QRTEA a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, FPR Partners, managed by Bob Peck and Andy Raab, holds the number one position in Qurate Retail, Inc. (NASDAQ:QRTEA). FPR Partners has a $151.8 million position in the stock, comprising 4% of its 13F portfolio. The second largest stake is held by Lyrical Asset Management, managed by Andrew Wellington and Jeff Keswin, which holds a $128.2 million position; 1.6% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish consist of Stephen Mildenhall’s Contrarius Investment Management, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position General Equity Partners allocated the biggest weight to Qurate Retail, Inc. (NASDAQ:QRTEA), around 10.51% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, designating 6.42 percent of its 13F equity portfolio to QRTEA.

Since Qurate Retail, Inc. (NASDAQ:QRTEA) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedgies that slashed their entire stakes last quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the largest position of all the hedgies watched by Insider Monkey, valued at close to $23.7 million in stock, and Steven Tananbaum’s GoldenTree Asset Management was right behind this move, as the fund cut about $9.9 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 5 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Qurate Retail, Inc. (NASDAQ:QRTEA). These stocks are The Hain Celestial Group, Inc. (NASDAQ:HAIN), The Ensign Group, Inc. (NASDAQ:ENSG), Lemonade, Inc. (NYSE:LMND), Warby Parker Inc. (NYSE:WRBY), ExlService Holdings, Inc. (NASDAQ:EXLS), Magnolia Oil & Gas Corporation (NYSE:MGY), and LivePerson, Inc. (NASDAQ:LPSN). This group of stocks’ market caps are similar to QRTEA’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.6 hedge funds with bullish positions and the average amount invested in these stocks was $433 million. That figure was $677 million in QRTEA’s case. Magnolia Oil & Gas Corporation (NYSE:MGY) is the most popular stock in this table. On the other hand Warby Parker Inc. (NYSE:WRBY) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Qurate Retail, Inc. (NASDAQ:QRTEA) is more popular among hedge funds. Our overall hedge fund sentiment score for QRTEA is 73.7. 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 gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, QRTEA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on QRTEA were disappointed as the stock returned -21.1% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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