Hedge Funds Are Selling SBA Communications Corporation (SBAC)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about SBA Communications Corporation (NASDAQ:SBAC) in this article.

SBA Communications Corporation (NASDAQ:SBAC) has seen a decrease in activity from the world’s largest hedge funds recently. SBA Communications Corporation (NASDAQ:SBAC) was in 36 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 57. There were 43 hedge funds in our database with SBAC holdings at the end of June. Our calculations also showed that SBAC 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. With all of this in mind we’re going to view the key hedge fund action regarding SBA Communications Corporation (NASDAQ:SBAC).

Donald Sussman of Paloma Partners

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

At third quarter’s end, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -16% from the previous quarter. On the other hand, there were a total of 43 hedge funds with a bullish position in SBAC a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Charles Akre’s Akre Capital Management has the number one position in SBA Communications Corporation (NASDAQ:SBAC), worth close to $638.1 million, comprising 3.9% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $213.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Zeno Research allocated the biggest weight to SBA Communications Corporation (NASDAQ:SBAC), around 9.13% of its 13F portfolio. Land & Buildings Investment Management is also relatively very bullish on the stock, setting aside 4.97 percent of its 13F equity portfolio to SBAC.

Because SBA Communications Corporation (NASDAQ:SBAC) has faced declining sentiment from hedge fund managers, it’s easy to see that there is a sect of hedgies who were dropping their full holdings heading into Q4. Intriguingly, Matthew Stadelman’s Diamond Hill Capital dropped the largest investment of all the hedgies monitored by Insider Monkey, totaling about $154.5 million in stock. John Khoury’s fund, Long Pond Capital, also dropped its stock, about $34.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 7 funds heading into Q4.

Let’s go over hedge fund activity in other stocks similar to SBA Communications Corporation (NASDAQ:SBAC). We will take a look at Yum! Brands, Inc. (NYSE:YUM), Cloudflare, Inc. (NYSE:NET), Mizuho Financial Group Inc. (NYSE:MFG), Robinhood Markets Inc. (NASDAQ:HOOD), Parker-Hannifin Corporation (NYSE:PH), AutoZone, Inc. (NYSE:AZO), and Unity Software Inc. (NYSE:U). This group of stocks’ market values are closest to SBAC’s market value.

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As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $2473 million. That figure was $1894 million in SBAC’s case. Cloudflare, Inc. (NYSE:NET) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 6 bullish hedge fund positions. SBA Communications Corporation (NASDAQ:SBAC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBAC is 51. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately SBAC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SBAC were disappointed as the stock returned 4.2% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.

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