Is Viacom, Inc. (NASDAQ:VIAB) a sound investment now? The best stock pickers are getting less optimistic. The number of long hedge fund bets went down by 3 in recent months.
According to most traders, hedge funds are perceived as worthless, outdated financial tools of yesteryear. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the upper echelon of this group, close to 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by monitoring their top equity investments, we have formulated a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, optimistic insider trading activity is another way to parse down the investments you’re interested in. Just as you’d expect, there are lots of incentives for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).
Consequently, let’s take a gander at the latest action surrounding Viacom, Inc. (NASDAQ:VIAB).
Hedge fund activity in Viacom, Inc. (NASDAQ:VIAB)
At Q1’s end, a total of 49 of the hedge funds we track were long in this stock, a change of -6% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Donald Yacktman’s Yacktman Asset Management had the largest position in Viacom, Inc. (NASDAQ:VIAB), worth close to $689.5 million, comprising 3.5% of its total 13F portfolio. Sitting at the No. 2 spot is Warren Buffett of Berkshire Hathaway, with a $467.7 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Mario Gabelli’s GAMCO Investors, Philippe Laffont’s Coatue Management and David Cohen and Harold Levy’s Iridian Asset Management.
Seeing as Viacom, Inc. (NASDAQ:VIAB) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedgies that elected to cut their entire stakes last quarter. Intriguingly, Jacob Doft’s Highline Capital Management sold off the biggest investment of all the hedgies we watch, totaling an estimated $82 million in call options, and Doug Silverman and Alexander Klabin of Senator Investment Group was right behind this move, as the fund dumped about $44.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.
What do corporate executives and insiders think about Viacom, Inc. (NASDAQ:VIAB)?
Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time frame, Viacom, Inc. (NASDAQ:VIAB) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Viacom, Inc. (NASDAQ:VIAB). These stocks are DISH Network Corp. (NASDAQ:DISH), Liberty Global Inc. (NASDAQ:LBTYA), Discovery Communications Inc. (NASDAQ:DISCA), Time Warner Cable Inc (NYSE:TWC), and DIRECTV (NASDAQ:DTV). This group of stocks belong to the catv systems industry and their market caps resemble VIAB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| DISH Network Corp. (NASDAQ:DISH) | 39 | 0 | 11 |
| Liberty Global Inc. (NASDAQ:LBTYA) | 75 | 0 | 0 |
| Discovery Communications Inc. (NASDAQ:DISCA) | 16 | 1 | 5 |
| Time Warner Cable Inc (NYSE:TWC) | 37 | 0 | 9 |
| DIRECTV (NASDAQ:DTV) | 45 | 0 | 6 |
With the results exhibited by the aforementioned strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Viacom, Inc. (NASDAQ:VIAB) is no exception.
