Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of The Liberty Braves Group (NASDAQ:BATRK).
Is The Liberty Braves Group (NASDAQ:BATRK) a bargain? Prominent investors are taking a pessimistic view. The number of bullish hedge fund positions decreased by 5 recently. Our calculations also showed that BATRK isn’t among the 30 most popular stocks among hedge funds (see the video below). BATRK was in 23 hedge funds’ portfolios at the end of the second quarter of 2019. There were 28 hedge funds in our database with BATRK positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the recent hedge fund action surrounding The Liberty Braves Group (NASDAQ:BATRK).
How are hedge funds trading The Liberty Braves Group (NASDAQ:BATRK)?
At the end of the second quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BATRK over the last 16 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.
Among these funds, Park West Asset Management held the most valuable stake in The Liberty Braves Group (NASDAQ:BATRK), which was worth $72.4 million at the end of the second quarter. On the second spot was Tensile Capital which amassed $51.7 million worth of shares. Moreover, GAMCO Investors, Mason Capital Management, and Renaissance Technologies were also bullish on The Liberty Braves Group (NASDAQ:BATRK), allocating a large percentage of their portfolios to this stock.
Due to the fact that The Liberty Braves Group (NASDAQ:BATRK) has faced a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few money managers that slashed their full holdings in the second quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the biggest position of the “upper crust” of funds followed by Insider Monkey, valued at about $1.7 million in stock. Israel Englander’s fund, Millennium Management, also dropped its stock, about $0.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds in the second quarter.
Let’s go over hedge fund activity in other stocks similar to The Liberty Braves Group (NASDAQ:BATRK). These stocks are Rush Enterprises, Inc. (NASDAQ:RUSHB), Gentherm Inc (NASDAQ:THRM), Employers Holdings, Inc. (NYSE:EIG), and Veritex Holdings Inc (NASDAQ:VBTX). All of these stocks’ market caps resemble BATRK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUSHB | 2 | 33341 | -1 |
| THRM | 15 | 63158 | -4 |
| EIG | 16 | 88500 | -1 |
| VBTX | 8 | 84647 | -3 |
| Average | 10.25 | 67412 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $333 million in BATRK’s case. Employers Holdings, Inc. (NYSE:EIG) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks The Liberty Braves Group (NASDAQ:BATRK) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately BATRK wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on BATRK were disappointed as the stock returned -0.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
