Is SBGI Stock A Buy or Sell?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is SBGI stock a buy? Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) has experienced an increase in hedge fund sentiment lately. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) was in 29 hedge funds’ portfolios at the end of December. The all time high for this statistic is 47. There were 20 hedge funds in our database with SBGI holdings at the end of September. Our calculations also showed that SBGI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Mario Gabelli of GAMCO Investors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 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 let’s analyze the new hedge fund action regarding Sinclair Broadcast Group, Inc. (NASDAQ:SBGI).

Do Hedge Funds Think SBGI Is A Good Stock To Buy Now?

Heading into the first quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 45% from the previous quarter. By comparison, 33 hedge funds held shares or bullish call options in SBGI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) was held by HG Vora Capital Management, which reported holding $151.3 million worth of stock at the end of December. It was followed by Contrarius Investment Management with a $112.9 million position. Other investors bullish on the company included GAMCO Investors, Rubric Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position HG Vora Capital Management allocated the biggest weight to Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), around 11.72% of its 13F portfolio. Contrarius Investment Management is also relatively very bullish on the stock, earmarking 7 percent of its 13F equity portfolio to SBGI.

As industrywide interest jumped, key money managers were breaking ground themselves. Rubric Capital Management, managed by David Rosen, assembled the largest position in Sinclair Broadcast Group, Inc. (NASDAQ:SBGI). Rubric Capital Management had $32 million invested in the company at the end of the quarter. Courtney Carson’s Hein Park Capital also initiated a $12.5 million position during the quarter. The other funds with new positions in the stock are Don Morgan’s Brigade Capital, John Overdeck and David Siegel’s Two Sigma Advisors, and Parvinder Thiara’s Athanor Capital.

Let’s go over hedge fund activity in other stocks similar to Sinclair Broadcast Group, Inc. (NASDAQ:SBGI). We will take a look at Simmons First National Corporation (NASDAQ:SFNC), Korn Ferry (NYSE:KFY), Gibraltar Industries Inc (NASDAQ:ROCK), RLJ Lodging Trust (NYSE:RLJ), Strategic Education Inc (NASDAQ:STRA), Ping Identity Holding Corp. (NYSE:PING), and Onto Innovation Inc. (NYSE:ONTO). This group of stocks’ market values are similar to SBGI’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $287 million. That figure was $454 million in SBGI’s case. Onto Innovation Inc. (NYSE:ONTO) is the most popular stock in this table. On the other hand Simmons First National Corporation (NASDAQ:SFNC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) is more popular among hedge funds. Our overall hedge fund sentiment score for SBGI is 78.5. 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 gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Unfortunately SBGI wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on SBGI were disappointed as the stock returned -5.9% since the end of the fourth quarter (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.