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 ViacomCBS Inc. (NASDAQ:VIAC) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
ViacomCBS Inc. (NASDAQ:VIAC) investors should pay attention to a decrease in hedge fund sentiment recently. ViacomCBS Inc. (NASDAQ:VIAC) was in 64 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 89. Our calculations also showed that VIAC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
John Rogers of Ariel Investments
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. With all of this in mind we’re going to take a look at the latest hedge fund action surrounding ViacomCBS Inc. (NASDAQ:VIAC).
Do Hedge Funds Think VIAC Is A Good Stock To Buy Now?
At third quarter’s end, a total of 64 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the second quarter of 2021. By comparison, 44 hedge funds held shares or bullish call options in VIAC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in ViacomCBS Inc. (NASDAQ:VIAC), which was worth $169.9 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $168.3 million worth of shares. Ariel Investments, Citadel Investment Group, and Glenview Capital 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 Becker Drapkin Management allocated the biggest weight to ViacomCBS Inc. (NASDAQ:VIAC), around 2.72% of its 13F portfolio. Prentice Capital Management is also relatively very bullish on the stock, dishing out 2.25 percent of its 13F equity portfolio to VIAC.
Because ViacomCBS Inc. (NASDAQ:VIAC) has witnessed bearish sentiment from the smart money, it’s safe to say that there exists a select few fund managers that elected to cut their positions entirely last quarter. At the top of the heap, David Tepper’s Appaloosa Management LP said goodbye to the largest investment of all the hedgies monitored by Insider Monkey, valued at about $66.7 million in stock. Jeffrey Altman’s fund, Owl Creek Asset Management, also dropped its stock, about $54.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 7 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to ViacomCBS Inc. (NASDAQ:VIAC). We will take a look at Canon Inc. (NYSE:CAJ), Carvana Co. (NYSE:CVNA), Gartner Inc (NYSE:IT), United Rentals, Inc. (NYSE:URI), ZTO Express (Cayman) Inc. (NYSE:ZTO), Bilibili Inc. (NASDAQ:BILI), and Fortive Corporation (NYSE:FTV). All of these stocks’ market caps resemble VIAC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAJ | 8 | 64340 | 0 |
| CVNA | 58 | 8309496 | -5 |
| IT | 33 | 2039924 | -6 |
| URI | 37 | 1382415 | -10 |
| ZTO | 20 | 1019859 | -1 |
| BILI | 35 | 1509730 | -12 |
| FTV | 32 | 2130115 | 1 |
| Average | 31.9 | 2350840 | -4.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.9 hedge funds with bullish positions and the average amount invested in these stocks was $2351 million. That figure was $1254 million in VIAC’s case. Carvana Co. (NYSE:CVNA) is the most popular stock in this table. On the other hand Canon Inc. (NYSE:CAJ) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks ViacomCBS Inc. (NASDAQ:VIAC) is more popular among hedge funds. Our overall hedge fund sentiment score for VIAC is 69.6. 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, VIAC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VIAC were disappointed as the stock returned -14.7% 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.
