Hedge Funds Are Warming Up To Fox Corporation (FOX)

In this article we will take a look at whether hedge funds think Fox Corporation (NASDAQ:FOX) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Fox Corporation (NASDAQ:FOX) investors should pay attention to an increase in hedge fund interest of late. Fox Corporation (NASDAQ:FOX) was in 25 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 49. Our calculations also showed that FOX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Michael Hintze of CQS Cayman LP

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. Now we’re going to review the latest hedge fund action surrounding Fox Corporation (NASDAQ:FOX).

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

At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 47% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FOX over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Fox Corporation (NASDAQ:FOX) was held by Yacktman Asset Management, which reported holding $301.8 million worth of stock at the end of December. It was followed by Baupost Group with a $198.4 million position. Other investors bullish on the company included CQS Cayman LP, 3G Sahana Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Hunting Hill Global Capital allocated the biggest weight to Fox Corporation (NASDAQ:FOX), around 5.26% of its 13F portfolio. 3G Sahana Capital Management is also relatively very bullish on the stock, dishing out 3.6 percent of its 13F equity portfolio to FOX.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. CQS Cayman LP, managed by Michael Hintze, established the most outsized position in Fox Corporation (NASDAQ:FOX). CQS Cayman LP had $48.7 million invested in the company at the end of the quarter. Munir Javeri’s 3G Sahana Capital Management also initiated a $29.1 million position during the quarter. The other funds with new positions in the stock are Stephen Mildenhall’s Contrarius Investment Management, Adam Guren’s Hunting Hill Global Capital, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Fox Corporation (NASDAQ:FOX) but similarly valued. These stocks are Fox Corporation (NASDAQ:FOXA), W.W. Grainger, Inc. (NYSE:GWW), Enphase Energy Inc (NASDAQ:ENPH), Martin Marietta Materials, Inc. (NYSE:MLM), West Pharmaceutical Services Inc. (NYSE:WST), Lyft, Inc. (NASDAQ:LYFT), and Ameren Corporation (NYSE:AEE). This group of stocks’ market caps are similar to FOX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.6 hedge funds with bullish positions and the average amount invested in these stocks was $945 million. That figure was $775 million in FOX’s case. Lyft, Inc. (NASDAQ:LYFT) is the most popular stock in this table. On the other hand Ameren Corporation (NYSE:AEE) is the least popular one with only 19 bullish hedge fund positions. Fox Corporation (NASDAQ:FOX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FOX is 32.6. 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. This is a slightly negative signal and 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 24% in 2021 through July 9th and surpassed the market again by 6.7 percentage points. Unfortunately FOX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); FOX investors were disappointed as the stock returned -1.2% since the end of March (through 7/9) 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 in 2021.

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