Hedge Funds Are Selling ViacomCBS Inc. (VIAC)

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of ViacomCBS Inc. (NASDAQ:VIAC) based on that data.

Is ViacomCBS Inc. (NASDAQ:VIAC) a buy here? The best stock pickers were turning less bullish. The number of bullish hedge fund bets were trimmed by 18 in recent months. ViacomCBS Inc. (NASDAQ:VIAC) was in 71 hedge funds’ portfolios at the end of June. 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 Q2 rankings). There were 89 hedge funds in our database with VIAC holdings at the end of March.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Larry Robbins of Glenview Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a peek at the new hedge fund action surrounding ViacomCBS Inc. (NASDAQ:VIAC).

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

At Q2’s end, a total of 71 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the first quarter of 2020. On the other hand, there were a total of 45 hedge funds with a bullish position in VIAC a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Marshall Wace LLP, managed by Paul Marshall and Ian Wace, holds the biggest position in ViacomCBS Inc. (NASDAQ:VIAC). Marshall Wace LLP has a $208.5 million position in the stock, comprising 1.1% of its 13F portfolio. On Marshall Wace LLP’s heels is Larry Robbins of Glenview Capital, with a $197.5 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism include Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Napier Park Global Capital allocated the biggest weight to ViacomCBS Inc. (NASDAQ:VIAC), around 14.76% of its 13F portfolio. Kettle Hill Capital Management is also relatively very bullish on the stock, earmarking 4.74 percent of its 13F equity portfolio to VIAC.

Because ViacomCBS Inc. (NASDAQ:VIAC) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds that decided to sell off their full holdings by the end of the second quarter. At the top of the heap, George Soros’s Soros Fund Management sold off the largest investment of the 750 funds monitored by Insider Monkey, worth about $194.3 million in stock. Parag Vora’s fund, HG Vora Capital Management, also sold off its stock, about $78.9 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 18 funds by the end of the second quarter.

Let’s now review hedge fund activity in other stocks similar to ViacomCBS Inc. (NASDAQ:VIAC). We will take a look at Occidental Petroleum Corporation (NYSE:OXY), Equifax Inc. (NYSE:EFX), AvalonBay Communities Inc (NYSE:AVB), Arthur J. Gallagher & Co. (NYSE:AJG), Ameriprise Financial, Inc. (NYSE:AMP), EPAM Systems Inc (NYSE:EPAM), and Best Buy Co., Inc. (NYSE:BBY). All of these stocks’ market caps resemble VIAC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.7 hedge funds with bullish positions and the average amount invested in these stocks was $1475 million. That figure was $1872 million in VIAC’s case. Occidental Petroleum Corporation (NYSE:OXY) is the most popular stock in this table. On the other hand AvalonBay Communities Inc (NYSE:AVB) is the least popular one with only 26 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 60.9. 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 24.1% in 2021 through September 20th and still beat the market by 6.9 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 -13.5% since the end of the second quarter (through 9/20) 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 most of these stocks already outperformed the market since 2019.

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

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