The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Commscope Holding Company Inc (NASDAQ:COMM)?
Is COMM a good stock to buy? Investors who are in the know were turning less bullish. The number of long hedge fund bets were trimmed by 2 recently. Commscope Holding Company Inc (NASDAQ:COMM) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 52. Our calculations also showed that COMM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 32 hedge funds in our database with COMM holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Andy Redleaf of Whitebox Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to check out the new hedge fund action surrounding Commscope Holding Company Inc (NASDAQ:COMM).
Do Hedge Funds Think COMM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards COMM over the last 21 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, FPR Partners was the largest shareholder of Commscope Holding Company Inc (NASDAQ:COMM), with a stake worth $148.1 million reported as of the end of September. Trailing FPR Partners was Adage Capital Management, which amassed a stake valued at $103.6 million. Lyrical Asset Management, Shelter Haven Capital Management, and Discovery Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Shelter Haven Capital Management allocated the biggest weight to Commscope Holding Company Inc (NASDAQ:COMM), around 16.48% of its 13F portfolio. FPR Partners is also relatively very bullish on the stock, dishing out 5.09 percent of its 13F equity portfolio to COMM.
Judging by the fact that Commscope Holding Company Inc (NASDAQ:COMM) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedgies who sold off their entire stakes heading into Q4. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest stake of the 750 funds tracked by Insider Monkey, worth an estimated $5.3 million in stock, and Jonathan Auerbach’s Hound Partners was right behind this move, as the fund dumped about $2.7 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Commscope Holding Company Inc (NASDAQ:COMM) but similarly valued. We will take a look at CNX Resources Corporation (NYSE:CNX), Macy’s, Inc. (NYSE:M), Federal Signal Corporation (NYSE:FSS), JinkoSolar Holding Co., Ltd. (NYSE:JKS), John Wiley & Sons Inc (NYSE:JW), Brandywine Realty Trust (NYSE:BDN), and InterDigital, Inc. (NASDAQ:IDCC). This group of stocks’ market values are similar to COMM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNX | 33 | 581481 | 5 |
| M | 28 | 363563 | -8 |
| FSS | 16 | 47491 | 4 |
| JKS | 10 | 42744 | 2 |
| JW | 17 | 58832 | 1 |
| BDN | 14 | 22407 | 2 |
| IDCC | 24 | 321360 | 1 |
| Average | 20.3 | 205411 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $205 million. That figure was $483 million in COMM’s case. CNX Resources Corporation (NYSE:CNX) is the most popular stock in this table. On the other hand JinkoSolar Holding Co., Ltd. (NYSE:JKS) is the least popular one with only 10 bullish hedge fund positions. Commscope Holding Company Inc (NASDAQ:COMM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for COMM is 63.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on COMM as the stock returned 47.6% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
