Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Liberty Broadband Corp (NASDAQ:LBRDK).
Liberty Broadband Corp (NASDAQ:LBRDK) investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Assurant, Inc. (NYSE:AIZ), Calpine Corporation (NYSE:CPN), and Relx PLC (ADR) (NYSE:RELX) to gather more data points.
In the 21st century investor’s toolkit, there are a lot of gauges stock market investors employ to size up their holdings. A duo of the most innovative gauges are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the elite investment managers can outperform the market by a significant margin (see the details here).
Now, we’re going to review the latest action regarding Liberty Broadband Corp (NASDAQ:LBRDK).
What does the smart money think about Liberty Broadband Corp (NASDAQ:LBRDK)?
At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 3% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, D E Shaw holds the biggest position in Liberty Broadband Corp (NASDAQ:LBRDK). D E Shaw has a $149.1 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by David Gallo of Valinor Management LLC, with a $124.7 million position; 3.3% of its 13F portfolio is allocated to the stock. Other peers with similar optimism contain Murray Stahl’s Horizon Asset Management, Wallace Weitz’s Wallace R. Weitz & Co., and Bob Peck and Andy Raab’s FPR Partners.
Because Liberty Broadband Corp (NASDAQ:LBRDK) has faced a bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few hedgies that decided to sell off their positions entirely by the end of the third quarter. At the top of the heap, Chase Coleman’s Tiger Global Management LLC sold off the largest stake of the 700 funds monitored by Insider Monkey, comprising close to $112.9 million in stock. John Burbank’s fund, Passport Capital, also cut its stock, about $9.9 million worth of shares. These transactions are important to note, as aggregate hedge fund interest fell by 1 fund by the end of the third quarter.
Let’s go over the hedge fund activity in other stocks similar to Liberty Broadband Corp (NASDAQ:LBRDK). These stocks are Assurant, Inc. (NYSE:AIZ), Calpine Corporation (NYSE:CPN), Relx PLC (ADR) (NYSE:RELX), and Keysight Technologies Inc (NYSE:KEYS). This group of stock market valuations resembles Liberty Broadband Corp (NASDAQ:LBRDK)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AIZ | 20 | 432750 | 3 |
| CPN | 38 | 983254 | -2 |
| RELX | 5 | 2907 | 4 |
| KEYS | 21 | 179301 | 3 |
As you can see, these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $400 million, with Calpine Corporation (NYSE:CPN) being the most popular and Relx PLC (ADR) (NYSE:RELX) being the least popular stock among hedge funds. Liberty Broadband Corp (NASDAQ:LBRDK) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Calpine Corporation (NYSE:CPN) might be a better candidate to consider a long position.
