Here is What Hedge Funds Think About Liberty Broadband Corp (LBRDA)

Is Liberty Broadband Corp (NASDAQ:LBRDA) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Liberty Broadband Corp (NASDAQ:LBRDA) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. At the end of this article we will also compare LBRDA to other stocks, including The Hain Celestial Group, Inc. (NASDAQ:HAIN), AMC Networks Inc (NASDAQ:AMCX), and Cytec Industries Inc (NYSE:CYT) to get a better sense of its popularity.

If you’d ask most traders, hedge funds are assumed to be slow, old investment tools of years past. While there are more than an 8000 funds with their doors open at present, We look at the moguls of this group, around 700 funds. These money managers oversee most of all hedge funds’ total capital, and by keeping track of their matchless stock picks, Insider Monkey has revealed numerous investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, let’s review the latest action encompassing Liberty Broadband Corp (NASDAQ:LBRDA).

What have hedge funds been doing with Liberty Broadband Corp (NASDAQ:LBRDA)?

Heading into Q4, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, D E Shaw holds the biggest position in Liberty Broadband Corp (NASDAQ:LBRDA). D E Shaw has a $78.1 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Horizon Asset Management, led by Murray Stahl, holding a $42.6 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining peers with similar optimism contain William Crowley, William Harker, and Stephen Blass’ Ashe Capital, Bob Peck and Andy Raab’s FPR Partners and Roberto Mignone’s Bridger Management.

Since Liberty Broadband Corp (NASDAQ:LBRDA) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there was a specific group of money managers that slashed their entire stakes by the end of the third quarter. Intriguingly, Robert Henry Lynch’s Aristeia Capital dumped the biggest investment of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $52 million in stock, and Andrew Goldman’s Seven Locks Capital Management was right behind this move, as the fund dumped about $8.9 million worth of shares. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Liberty Broadband Corp (NASDAQ:LBRDA). These stocks are The Hain Celestial Group, Inc. (NASDAQ:HAIN), AMC Networks Inc (NASDAQ:AMCX), Cytec Industries Inc (NYSE:CYT), and Liberty Broadband Corp (NASDAQ:LBRDK). This group of stocks’ market valuations match LBRDA’s market valuation.

As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $657 million. That figure was $322 million in LBRDA’s case. Cytec Industries Inc (NYSE:CYT) is the most popular stock in this table. On the other hand AMC Networks Inc (NASDAQ:AMCX) is the least popular one with only 24 bullish hedge fund positions. Liberty Broadband Corp (NASDAQ:LBRDA) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CYT might be a better candidate to consider a long position.