Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards DISH Network Corp. (NASDAQ:DISH) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Hedge fund interest in DISH Network Corp. (NASDAQ:DISH) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that DISH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare DISH to other stocks including Verisign, Inc. (NASDAQ:VRSN), Huntington Bancshares Incorporated (NASDAQ:HBAN), and ORIX Corporation (NYSE:IX) to get a better sense of its popularity.
Boykin Curry of Eagle Capital
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. Keeping this in mind let’s take a gander at the latest hedge fund action encompassing DISH Network Corp. (NASDAQ:DISH).
Do Hedge Funds Think DISH Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 51 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 60 hedge funds held shares or bullish call options in DISH a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Eagle Capital Management held the most valuable stake in DISH Network Corp. (NASDAQ:DISH), which was worth $799.7 million at the end of the third quarter. On the second spot was Palestra Capital Management which amassed $437.5 million worth of shares. Jericho Capital Asset Management, Atreides Management, and D E Shaw 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 Pennant Capital Management allocated the biggest weight to DISH Network Corp. (NASDAQ:DISH), around 18.4% of its 13F portfolio. Key Square Capital Management is also relatively very bullish on the stock, earmarking 13.3 percent of its 13F equity portfolio to DISH.
Since DISH Network Corp. (NASDAQ:DISH) has faced declining sentiment from hedge fund managers, we can see that there lies a certain “tier” of funds that slashed their full holdings last quarter. Interestingly, John Paulson’s Paulson & Co sold off the largest stake of the 750 funds tracked by Insider Monkey, comprising an estimated $139.9 million in stock. Zach Schreiber’s fund, Point State Capital, also dumped its stock, about $24.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as DISH Network Corp. (NASDAQ:DISH) but similarly valued. These stocks are Verisign, Inc. (NASDAQ:VRSN), Huntington Bancshares Incorporated (NASDAQ:HBAN), ORIX Corporation (NYSE:IX), Invitation Homes Inc. (NYSE:INVH), Catalent Inc (NYSE:CTLT), Ginkgo Bioworks Holdings Inc. (NYSE:DNA), and Royal Caribbean Cruises Ltd. (NYSE:RCL). This group of stocks’ market caps match DISH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VRSN | 40 | 5398949 | -1 |
| HBAN | 27 | 298895 | -6 |
| IX | 4 | 5007 | 0 |
| INVH | 36 | 824544 | 3 |
| CTLT | 38 | 1113573 | -2 |
| DNA | 32 | 5696252 | 32 |
| RCL | 35 | 575404 | -7 |
| Average | 30.3 | 1987518 | 2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $1988 million. That figure was $2440 million in DISH’s case. Verisign, Inc. (NASDAQ:VRSN) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks DISH Network Corp. (NASDAQ:DISH) is more popular among hedge funds. Our overall hedge fund sentiment score for DISH is 80.5. 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 gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, DISH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DISH were disappointed as the stock returned -27.7% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Dish Network Corp (NASDAQ:DISH)
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Disclosure: None. This article was originally published at Insider Monkey.
