Is Sabre Corp (SABR) Going to Burn These Hedge Funds?

Is Sabre Corp (NASDAQ:SABR) a good stock to buy right now? We, at Insider Monkey, like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is Sabre Corp (NASDAQ:SABR) going to take off soon? Investors who are in the know are turning less bullish. The number of bullish hedge fund positions retreated by 1 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as News Corp (NASDAQ:NWS), Leucadia National Corp. (NYSE:LUK), and Barrick Gold Corporation (USA) (NYSE:ABX) to gather more data points.

According to most traders, hedge funds are assumed to be unimportant, outdated financial vehicles of the past. While there are greater than 8000 funds in operation at the moment, our researchers choose to focus on the top tier of this club, around 700 funds. These investment experts have their hands on the majority of the hedge fund industry’s total capital, and by keeping an eye on their finest stock picks, Insider Monkey has spotted a few investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, we’re going to take a look at the latest action regarding Sabre Corp (NASDAQ:SABR).

Hedge fund activity in Sabre Corp (NASDAQ:SABR)

Heading into Q4, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 3% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Maverick Capital, managed by Lee Ainslie, holds the number one position in Sabre Corp (NASDAQ:SABR). Maverick Capital has a $299.7 million position in the stock, comprising 5.1% of its 13F portfolio. Sitting at the No. 2 spot is Bain Capital of Brookside Capital, with a $86.5 million position; 2.6% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism encompass John Overdeck and David Siegel’s Two Sigma Advisors, Dmitry Balyasny’s Balyasny Asset Management, and D E Shaw.

Since Sabre Corp (NASDAQ:SABR) has witnessed a declining sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedgies who sold off their positions entirely in the third quarter. At the top of the heap, Daniel Lewis’ Orange Capital said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $72.9 million in stock, and Brian Jackelow’s SAB Capital Management was right behind this move, as the fund dropped about $47.6 million worth of shares. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 fund in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Sabre Corp (NASDAQ:SABR). We will take a look at News Corp (NASDAQ:NWS), Leucadia National Corp. (NYSE:LUK), Barrick Gold Corporation (USA) (NYSE:ABX), and HCC Insurance Holdings, Inc. (NYSE:HCC). This group of stocks’ market values resembles Sabre Corp (NASDAQ:SABR)’s market value.

As you can see, these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $705 million. That figure was $849 million in Sabre Corp (NASDAQ:SABR)’s case. Barrick Gold Corporation (USA) (NYSE:ABX) is the most popular stock in this table. On the other hand, News Corp (NASDAQ:NWS) is the least popular one with only 15 bullish hedge fund positions. Sabre Corp (NASDAQ:SABR) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Barrick Gold Corporation (USA) (NYSE:ABX) might be a better candidate to consider a long position.