In this article we will check out the progression of hedge fund sentiment towards Frontier Communications Parent Inc. (NASDAQ:FYBR) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ 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 Frontier Communications Parent Inc. (NASDAQ:FYBR) a buy, sell, or hold? Money managers were in a bullish mood. The number of long hedge fund bets rose by 43 lately. Frontier Communications Parent Inc. (NASDAQ:FYBR) was in 43 hedge funds’ portfolios at the end of September. Our calculations also showed that FYBR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Stephen Feinberg of Cerberus Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now let’s view the new hedge fund action surrounding Frontier Communications Parent Inc. (NASDAQ:FYBR).
Do Hedge Funds Think FYBR Is A Good Stock To Buy Now?
At Q3’s end, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43 from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in FYBR a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Glendon Capital Management was the largest shareholder of Frontier Communications Parent Inc. (NASDAQ:FYBR), with a stake worth $582.4 million reported as of the end of September. Trailing Glendon Capital Management was Cerberus Capital Management, which amassed a stake valued at $575.7 million. Silver Point Capital, Empyrean Capital Partners, and Beach Point Capital Management 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 Marathon Asset Management allocated the biggest weight to Frontier Communications Parent Inc. (NASDAQ:FYBR), around 78.65% of its 13F portfolio. Beach Point Capital Management is also relatively very bullish on the stock, setting aside 35.06 percent of its 13F equity portfolio to FYBR.
Consequently, key money managers were leading the bulls’ herd. Mudrick Capital Management, managed by Jason Mudrick, created the biggest position in Frontier Communications Parent Inc. (NASDAQ:FYBR). Mudrick Capital Management had $35.1 million invested in the company at the end of the quarter. Mark G. Schoeppner’s Quaker Capital Investments also made a $9.6 million investment in the stock during the quarter. The following funds were also among the new FYBR investors: Zach Schreiber’s Point State Capital, Robert Henry Lynch’s Aristeia Capital, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Frontier Communications Parent Inc. (NASDAQ:FYBR) but similarly valued. These stocks are Ritchie Bros. Auctioneers (NYSE:RBA), Thor Industries, Inc. (NYSE:THO), Medpace Holdings, Inc. (NASDAQ:MEDP), Kinross Gold Corporation (NYSE:KGC), TopBuild Corp (NYSE:BLD), Envista Holdings Corporation (NYSE:NVST), and American Campus Communities, Inc. (NYSE:ACC). This group of stocks’ market caps are closest to FYBR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RBA | 13 | 277550 | -9 |
| THO | 29 | 174266 | 3 |
| MEDP | 23 | 424211 | -1 |
| KGC | 27 | 321000 | -1 |
| BLD | 17 | 93609 | -5 |
| NVST | 33 | 1073278 | -5 |
| ACC | 17 | 147769 | -4 |
| Average | 22.7 | 358812 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.7 hedge funds with bullish positions and the average amount invested in these stocks was $359 million. That figure was $3539 million in FYBR’s case. Envista Holdings Corporation (NYSE:NVST) is the most popular stock in this table. On the other hand Ritchie Bros. Auctioneers (NYSE:RBA) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Frontier Communications Parent Inc. (NASDAQ:FYBR) is more popular among hedge funds. Our overall hedge fund sentiment score for FYBR is 90. 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 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on FYBR as the stock returned 19.9% since the end of September (through 11/30) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
