While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Fox Corporation (NASDAQ:FOXA).
Is FOXA stock a buy or sell? Fox Corporation (NASDAQ:FOXA) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. Fox Corporation (NASDAQ:FOXA) was in 39 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 78. There were 32 hedge funds in our database with FOXA holdings at the end of September. Our calculations also showed that FOXA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Donald Yacktman of Yacktman Asset Management
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 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 review the fresh hedge fund action surrounding Fox Corporation (NASDAQ:FOXA).
Do Hedge Funds Think FOXA Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22% from the previous quarter. On the other hand, there were a total of 37 hedge funds with a bullish position in FOXA a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Fox Corporation (NASDAQ:FOXA) was held by Baupost Group, which reported holding $646.1 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $171.9 million position. Other investors bullish on the company included Yacktman Asset Management, 3G Sahana Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position 3G Sahana Capital Management allocated the biggest weight to Fox Corporation (NASDAQ:FOXA), around 10.85% of its 13F portfolio. 59 North Capital is also relatively very bullish on the stock, designating 7.48 percent of its 13F equity portfolio to FOXA.
As one would reasonably expect, specific money managers have been driving this bullishness. 59 North Capital, managed by Michael Bilger, created the largest position in Fox Corporation (NASDAQ:FOXA). 59 North Capital had $20.1 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $5.8 million investment in the stock during the quarter. The other funds with brand new FOXA positions are Greg Eisner’s Engineers Gate Manager, Matthew Hulsizer’s PEAK6 Capital Management, and Jinghua Yan’s TwinBeech Capital.
Let’s go over hedge fund activity in other stocks similar to Fox Corporation (NASDAQ:FOXA). These stocks are Burlington Stores Inc (NYSE:BURL), Fox Corporation (NASDAQ:FOX), Catalent Inc (NYSE:CTLT), Akamai Technologies, Inc. (NASDAQ:AKAM), Agnico Eagle Mines Limited (NYSE:AEM), Cheniere Energy Partners LP (NYSE:CQP), and ONEOK, Inc. (NYSE:OKE). This group of stocks’ market values are closest to FOXA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BURL | 29 | 1335724 | -1 |
| FOX | 17 | 530820 | 2 |
| CTLT | 35 | 839418 | -5 |
| AKAM | 33 | 280317 | -7 |
| AEM | 36 | 388901 | 8 |
| CQP | 4 | 9283 | 1 |
| OKE | 22 | 105420 | 2 |
| Average | 25.1 | 498555 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.1 hedge funds with bullish positions and the average amount invested in these stocks was $499 million. That figure was $1293 million in FOXA’s case. Agnico Eagle Mines Limited (NYSE:AEM) is the most popular stock in this table. On the other hand Cheniere Energy Partners LP (NYSE:CQP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Fox Corporation (NASDAQ:FOXA) is more popular among hedge funds. Our overall hedge fund sentiment score for FOXA is 75. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on FOXA as the stock returned 47.4% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
