The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Liberty Broadband Corp (NASDAQ:LBRDA) based on those filings.
Is Liberty Broadband Corp (NASDAQ:LBRDA) undervalued? The smart money is betting on the stock. The number of long hedge fund bets went up by 2 lately. Our calculations also showed that LBRDA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). LBRDA was in 26 hedge funds’ portfolios at the end of March. There were 24 hedge funds in our database with LBRDA holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Boykin Curry of Eagle Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the recent hedge fund action regarding Liberty Broadband Corp (NASDAQ:LBRDA).
How have hedgies been trading Liberty Broadband Corp (NASDAQ:LBRDA)?
At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LBRDA over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, FPR Partners, managed by Bob Peck and Andy Raab, holds the largest position in Liberty Broadband Corp (NASDAQ:LBRDA). FPR Partners has a $124.6 million position in the stock, comprising 5.1% of its 13F portfolio. Coming in second is Ashe Capital, led by William Crowley, William Harker, and Stephen Blass, holding a $110 million position; the fund has 10.2% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions encompass Boykin Curry’s Eagle Capital Management, Sander Gerber’s Hudson Bay Capital Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Act II Capital allocated the biggest weight to Liberty Broadband Corp (NASDAQ:LBRDA), around 14.66% of its 13F portfolio. Ashe Capital is also relatively very bullish on the stock, earmarking 10.18 percent of its 13F equity portfolio to LBRDA.
As aggregate interest increased, specific money managers were breaking ground themselves. Stony Point Capital, managed by Richard Walters II, established the largest position in Liberty Broadband Corp (NASDAQ:LBRDA). Stony Point Capital had $5.2 million invested in the company at the end of the quarter. Morris Mark’s Mark Asset Management also made a $4.3 million investment in the stock during the quarter. The other funds with brand new LBRDA positions are Ken Griffin’s Citadel Investment Group, Steve Pigott’s Fort Baker Capital Management, and Brett Huckelbridge’s Steel Canyon Capital.
Let’s now review hedge fund activity in other stocks similar to Liberty Broadband Corp (NASDAQ:LBRDA). We will take a look at Nutrien Ltd. (NYSE:NTR), Xilinx, Inc. (NASDAQ:XLNX), Synopsys, Inc. (NASDAQ:SNPS), and Twitter Inc (NYSE:TWTR). All of these stocks’ market caps are similar to LBRDA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTR | 22 | 269579 | -6 |
| XLNX | 38 | 635591 | -4 |
| SNPS | 31 | 725655 | -14 |
| TWTR | 55 | 990334 | 0 |
| Average | 36.5 | 655290 | -6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.5 hedge funds with bullish positions and the average amount invested in these stocks was $655 million. That figure was $656 million in LBRDA’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Nutrien Ltd. (NYSE:NTR) is the least popular one with only 22 bullish hedge fund positions. Liberty Broadband Corp (NASDAQ:LBRDA) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on LBRDA as the stock returned 25.9% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
