Is CBS Corporation (CBS) A Good Stock To Buy?

Is CBS Corporation (NYSE:CBS) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.

Is CBS Corporation (NYSE:CBS) ready to rally soon? Prominent investors are in a pessimistic mood. The number of long hedge fund positions were trimmed by 9 recently. CBS was in 62 hedge funds’ portfolios at the end of September. There were 71 hedge funds in our database with CBS holdings at the end of the previous quarter. At the end of this article we will also compare CBS to other stocks including Williams Partners L.P. (NYSE:WPZ), Zimmer Biomet Holdings Inc (NYSE:ZBH), and Hartford Financial Services Group Inc (NYSE:HIG) to get a better sense of its popularity.

In the financial world, there are several methods that stock market investors can use to appraise their holdings. A duo of the most useful methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the elite money managers can outclass the broader indices by a superb margin (see the details here).

Now, we’re going to review the new action surrounding CBS Corporation (NYSE:CBS).

How have hedgies been trading CBS Corporation (NYSE:CBS)?

At the end of the third quarter, a total of 62 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 13% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Highfields Capital Management, managed by Jonathon Jacobson, holds the most valuable position in CBS Corporation (NYSE:CBS). According to its latest quarterly report, the fund has a $729.6 million position in the stock, comprising 6.4% of its 13F portfolio. Sitting at the No. 2 spot is Larry Robbins of Glenview Capital, with a $432.3 million position; 2.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish comprise John Shapiro’s Chieftain Capital, Philippe Laffont’s Coatue Management and Eric W. Mandelblatt’s Soroban Capital Partners.

Since CBS Corporation (NYSE:CBS) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedgies that elected to cut their full holdings heading into Q4. It’s worth mentioning that Peter Adam Hochfelder’s Brahman Capital sold off the largest position of the “upper crust” of funds watched by Insider Monkey, valued at close to $217.7 million in stock, and Jason Karp’s Tourbillon Capital Partners was right behind this move, as the fund dropped about $66.6 million worth of CBS shares. These transactions are interesting, as aggregate hedge fund interest dropped by 9 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CBS Corporation (NYSE:CBS) but similarly valued. These stocks are Williams Partners L.P. (NYSE:WPZ), Zimmer Biomet Holdings Inc (NYSE:ZBH), Hartford Financial Services Group Inc (NYSE:HIG), and TELUS Corporation (USA) (NYSE:TU). This group of stocks’ market valuations match CBS’s market valuation.

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $549 million. Hartford Financial Services Group Inc (NYSE:HIG) is the most popular stock in this table. On the other hand TELUS Corporation (USA) (NYSE:TU) is the least popular one with only 11 bullish hedge fund positions. CBS Corporation (NYSE:CBS) is clearly the leader of this group, having also attracted a larger amount of the hedge funds’ money: $3.46 billion at the end of September. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.