The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Viacom, Inc. (NASDAQ:VIAB).
Viacom, Inc. (NASDAQ:VIAB) investors should pay attention to an increase in enthusiasm from smart money in recent months. More specifically, there were 44 funds in our database long the stock at the end of the third quarter, versus 41 funds at the end of June. At the end of this article we will also compare VIAB to other stocks including Perrigo Company (NASDAQ:PRGO), KeyCorp (NYSE:KEY), and Waste Connections, Inc. (NYSE:WCN) to get a better sense of its popularity.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Keeping this in mind, let’s take a gander at the latest action encompassing Viacom, Inc. (NASDAQ:VIAB).
Hedge fund activity in Viacom, Inc. (NASDAQ:VIAB)
At the end of September, 44 funds tracked by Insider Monkey were long Viacom, which represents a change of 7% from one quarter earlier. On the other hand, there were a total of 48 hedge funds with a bullish position in VIAB at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Donald Yacktman’s Yacktman Asset Management has the number one position in Viacom, Inc. (NASDAQ:VIAB), worth close to $165.6 million, comprising 1.4% of its total 13F portfolio. Sitting at the No. 2 spot is Mario Gabelli’s GAMCO Investors, with a $133.5 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism include John W. Rogers’ Ariel Investments, Barry Rosenstein’s JANA Partners, and Brett Barakett’s Tremblant Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. JANA Partners assembled the biggest position in Viacom, Inc. (NASDAQ:VIAB). JANA Partners had $105.3 million invested in the company at the end of the quarter. Buckley Ratchford’s Wingspan Investment Management also made a $58 million investment in the stock during the third quarter. The following funds were also among the new VIAB investors: James Dinan’s York Capital Management, Kenneth Mario Garschina’s Mason Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s also examine hedge fund activity in other stocks similar to Viacom, Inc. (NASDAQ:VIAB). We will take a look at Perrigo Company (NASDAQ:PRGO), KeyCorp (NYSE:KEY), Waste Connections, Inc. (NYSE:WCN), and ServiceNow Inc (NYSE:NOW). This group of stocks’ market values are similar to VIAB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRGO | 30 | 1620457 | 2 |
| KEY | 42 | 727656 | -4 |
| WCN | 29 | 986577 | 1 |
| NOW | 31 | 981619 | 0 |
As you can see these stocks had an average of 33 investors with bullish positions and the average amount invested in these stocks was $1.08 billion. That figure was $1.07 billion in VIAB’s case. KeyCorp (NYSE:KEY) is the most popular stock in this table, while Waste Connections, Inc. (NYSE:WCN) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Viacom, Inc. (NASDAQ:VIAB) 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.
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