“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Twenty-First Century Fox Inc (NASDAQ:FOXA) and see how it was affected.
Twenty-First Century Fox Inc (NASDAQ:FOXA) has experienced an increase in activity from the world’s largest hedge funds lately. Moreover FOXA is also the 21st most popular stock among hedge funds at the end of the second quarter (see the list of 25 most popular stocks among hedge funds).
In the 21st century investor’s toolkit there are a large number of metrics stock traders have at their disposal to value their stock investments. Some of the most innovative metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the S&P 500 by a significant margin (see the details here).
Let’s take a look at the recent hedge fund action regarding Twenty-First Century Fox Inc (NASDAQ:FOXA).
How are hedge funds trading Twenty-First Century Fox Inc (NASDAQ:FOXA)?
At Q3’s end, a total of 78 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 56% from the second quarter of 2018. By comparison, 44 hedge funds held shares or bullish call options in FOXA heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baupost Group held the most valuable stake in Twenty-First Century Fox Inc (NASDAQ:FOXA), which was worth $1958.6 millions at the end of the second quarter. On the second spot was Egerton Capital Limited which amassed $1333.4 millions worth of shares. Moreover, Hound Partners, Guardian Point Capital, and Sand Grove Capital Partners were also bullish on Twenty-First Century Fox Inc (NASDAQ:FOXA), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Sand Grove Capital Partners, managed by Simon Davies, initiated the most outsized position in Twenty-First Century Fox Inc (in terms of size of the position in the fund’s portfolio). Sand Grove Capital Partners had $163.3 million invested in the company at the end of the quarter. Kenneth Mario Garschina’s Mason Capital Management also made a $366.5 million investment in the stock during the quarter. The other funds with brand new FOXA positions are Howard Guberman’s Gruss Asset Management, Guy Shahar’s DSAM Partners, and Nancy Havens-Hasty’s Havens Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Twenty-First Century Fox Inc (NASDAQ:FOXA) but similarly valued. These stocks are Mondelez International Inc (NASDAQ:MDLZ), Las Vegas Sands Corp. (NYSE:LVS), Canadian National Railway (USA) (NYSE:CNI), and Enterprise Products Partners L.P. (NYSE:EPD). This group of stocks’ market caps are closest to FOXA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDLZ | 45 | 3606210 | -10 |
| LVS | 28 | 889818 | -4 |
| CNI | 21 | 2454524 | 1 |
| EPD | 22 | 322880 | 0 |
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $1818 million. That figure was $9841 million in FOXA’s case. Mondelez International Inc (NASDAQ:MDLZ) is the most popular stock in this table. On the other hand Canadian National Railway (USA) (NYSE:CNI) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Twenty-First Century Fox Inc (NASDAQ:FOXA) is more popular among hedge funds. 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.
Disclosure: None. This article was originally published at Insider Monkey.
