As we already know from media reports and hedge fund investor letters, many hedge funds lost money in fourth quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with technology among them. Nevertheless, most hedge fund managers decided to stick to their bullish theses and recouped their losses by the end of the first quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about The Walt Disney Company (NYSE:DIS).
Is The Walt Disney Company (NYSE:DIS) a healthy stock for your portfolio? Hedge funds are in an extremely bullish mood. The number of long hedge fund bets rose by 43 in recent months. Our calculations also showed that DIS isn’t among the 30 most popular stocks among hedge funds. DIS was in 114 hedge funds’ portfolios at the end of March. There were 71 hedge funds in our database with DIS holdings at the end of the previous quarter.
In the financial world there are tons of methods stock market investors have at their disposal to appraise their stock investments. A duo of the most underrated methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best money managers can outpace the broader indices by a solid amount (see the details here).
Let’s view the key hedge fund action regarding The Walt Disney Company (NYSE:DIS).
How have hedgies been trading The Walt Disney Company (NYSE:DIS)?
At Q1’s end, a total of 114 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 61% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in DIS over the last 15 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Point72 Asset Management held the most valuable stake in The Walt Disney Company (NYSE:DIS), which was worth $1142.1 million at the end of the first quarter. On the second spot was D1 Capital Partners which amassed $701.7 million worth of shares. Moreover, Millennium Management, Yacktman Asset Management, and Citadel Investment Group were also bullish on The Walt Disney Company (NYSE:DIS), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Yacktman Asset Management, managed by Donald Yacktman, initiated the most valuable position in The Walt Disney Company (NYSE:DIS). Yacktman Asset Management had $507.1 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $226 million investment in the stock during the quarter. The other funds with brand new DIS positions are Matthew Halbower’s Pentwater Capital Management, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, and Shane Finemore’s Manikay Partners.
Let’s also examine hedge fund activity in other stocks similar to The Walt Disney Company (NYSE:DIS). These stocks are Oracle Corporation (NYSE:ORCL), Comcast Corporation (NASDAQ:CMCSA), PepsiCo, Inc. (NASDAQ:PEP), and Toyota Motor Corporation (NYSE:TM). This group of stocks’ market values resemble DIS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ORCL | 52 | 4994743 | -2 |
| CMCSA | 87 | 6279870 | 4 |
| PEP | 51 | 4490981 | -2 |
| TM | 10 | 161453 | 2 |
| Average | 50 | 3981762 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 50 hedge funds with bullish positions and the average amount invested in these stocks was $3982 million. That figure was $7046 million in DIS’s case. Comcast Corporation (NASDAQ:CMCSA) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks The Walt Disney Company (NYSE:DIS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on DIS as the stock returned 19.1% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
