Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about SBA Communications Corporation (NASDAQ:SBAC) in this article.
Is SBA Communications Corporation (NASDAQ:SBAC) a superb investment now? Prominent investors were cutting their exposure. The number of bullish hedge fund bets fell by 5 recently. SBA Communications Corporation (NASDAQ:SBAC) was in 38 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 57. Our calculations also showed that SBAC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 43 hedge funds in our database with SBAC positions at the end of the fourth quarter.
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
David Siegel of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we’re going to take a look at the key hedge fund action encompassing SBA Communications Corporation (NASDAQ:SBAC).
Do Hedge Funds Think SBAC Is A Good Stock To Buy Now?
At first quarter’s end, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the fourth quarter of 2020. On the other hand, there were a total of 46 hedge funds with a bullish position in SBAC 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.
More specifically, Akre Capital Management was the largest shareholder of SBA Communications Corporation (NASDAQ:SBAC), with a stake worth $634.2 million reported as of the end of March. Trailing Akre Capital Management was D E Shaw, which amassed a stake valued at $277.4 million. Citadel Investment Group, Two Sigma Advisors, and Diamond Hill Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Land & Buildings Investment Management allocated the biggest weight to SBA Communications Corporation (NASDAQ:SBAC), around 6.05% of its 13F portfolio. Kettle Hill Capital Management is also relatively very bullish on the stock, setting aside 5.17 percent of its 13F equity portfolio to SBAC.
Because SBA Communications Corporation (NASDAQ:SBAC) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their positions entirely last quarter. Intriguingly, Stuart J. Zimmer’s Zimmer Partners said goodbye to the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at about $77.6 million in stock, and Robert Pitts’s Steadfast Capital Management was right behind this move, as the fund said goodbye to about $30.2 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 5 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to SBA Communications Corporation (NASDAQ:SBAC). We will take a look at Skyworks Solutions Inc (NASDAQ:SWKS), Fortinet Inc (NASDAQ:FTNT), Welltower Inc. (NYSE:WELL), Eversource Energy (NYSE:ES), Sun Life Financial Inc. (NYSE:SLF), State Street Corporation (NYSE:STT), and WEC Energy Group, Inc. (NYSE:WEC). This group of stocks’ market valuations are closest to SBAC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SWKS | 33 | 765774 | -8 |
| FTNT | 23 | 906297 | -9 |
| WELL | 21 | 326506 | -5 |
| ES | 24 | 421208 | 0 |
| SLF | 17 | 139250 | -2 |
| STT | 32 | 866316 | 1 |
| WEC | 17 | 184448 | -8 |
| Average | 23.9 | 515686 | -4.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $516 million. That figure was $2090 million in SBAC’s case. Skyworks Solutions Inc (NASDAQ:SWKS) is the most popular stock in this table. On the other hand Sun Life Financial Inc. (NYSE:SLF) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks SBA Communications Corporation (NASDAQ:SBAC) is more popular among hedge funds. Our overall hedge fund sentiment score for SBAC is 70. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 19.3% in 2021 through June 25th but still managed to beat the market by 4.8 percentage points. Hedge funds were also right about betting on SBAC as the stock returned 15.2% since the end of March (through 6/25) 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.
Follow Sba Communications Corp (NASDAQ:SBAC)
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Disclosure: None. This article was originally published at Insider Monkey.
