Coronavirus is probably the #1 concern in investors’ minds right now. It should be. On February 27th we published this article and predicted that US stocks will go down by at least 20% in the next 3-6 months. We also told you to short the market ETFs and buy long-term bonds. Investors who agreed with us and replicated these trades are up double digits whereas the market is down double digits. In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 835 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Liberty Broadband Corp (NASDAQ:LBRDK), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Liberty Broadband Corp (NASDAQ:LBRDK) was in 46 hedge funds’ portfolios at the end of the fourth quarter of 2019. LBRDK has seen an increase in support from the world’s most elite money managers recently. There were 44 hedge funds in our database with LBRDK holdings at the end of the previous quarter. Our calculations also showed that LBRDK isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 41 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 35.3% through March 3rd. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Philippe Laffont of Coatue Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. In January, we recommended a long position in one of the most shorted stocks in the market, and that stock returned more than 50% despite the large losses in the market since our recommendation. Keeping this in mind let’s take a look at the latest hedge fund action encompassing Liberty Broadband Corp (NASDAQ:LBRDK).
Hedge fund activity in Liberty Broadband Corp (NASDAQ:LBRDK)
At the end of the fourth quarter, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LBRDK over the last 18 quarters. 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, Philippe Laffont’s Coatue Management has the biggest position in Liberty Broadband Corp (NASDAQ:LBRDK), worth close to $1.0116 billion, amounting to 8% of its total 13F portfolio. Coming in second is Eagle Capital Management, managed by Boykin Curry, which holds a $816.1 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions consist of George Soros’s Soros Fund Management, Sharlyn C. Heslam’s Stockbridge Partners and William Crowley, William Harker, and Stephen Blass’s Ashe Capital. In terms of the portfolio weights assigned to each position Soros Fund Management allocated the biggest weight to Liberty Broadband Corp (NASDAQ:LBRDK), around 23.1% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, earmarking 18.73 percent of its 13F equity portfolio to LBRDK.
As aggregate interest increased, some big names were breaking ground themselves. Center Lake Capital, managed by Adam Parker, created the largest position in Liberty Broadband Corp (NASDAQ:LBRDK). Center Lake Capital had $16.3 million invested in the company at the end of the quarter. Chris Yetter’s Dumont Global also initiated a $12 million position during the quarter. The following funds were also among the new LBRDK investors: Andre F. Perold’s HighVista Strategies, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Renaissance Technologies.
Let’s go over hedge fund activity in other stocks similar to Liberty Broadband Corp (NASDAQ:LBRDK). We will take a look at AMETEK, Inc. (NYSE:AME), Best Buy Co., Inc. (NYSE:BBY), Palo Alto Networks Inc (NYSE:PANW), and Verisign, Inc. (NASDAQ:VRSN). All of these stocks’ market caps resemble LBRDK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AME | 32 | 809768 | -1 |
| BBY | 25 | 686035 | -3 |
| PANW | 47 | 3168440 | -5 |
| VRSN | 38 | 5872682 | 6 |
| Average | 35.5 | 2634231 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.5 hedge funds with bullish positions and the average amount invested in these stocks was $2634 million. That figure was $4094 million in LBRDK’s case. Palo Alto Networks Inc (NYSE:PANW) is the most popular stock in this table. On the other hand Best Buy Co., Inc. (NYSE:BBY) is the least popular one with only 25 bullish hedge fund positions. Liberty Broadband Corp (NASDAQ:LBRDK) is not the most popular stock in this group but hedge fund interest is still above average. 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 10.1 percentage points. These stocks lost 12.9% in 2020 through March 9th but still beat the market by 1.9 percentage points. Hedge funds were also right about betting on LBRDK as the stock returned -9.2% during the first quarter (through March 9th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
