Viacom, Inc. (NASDAQ:VIAB) has had a gigantic 2013. How are money managers and other hedge funds treating the stock now? With a bit of profit-taking it appears.
According to many of your fellow readers, hedge funds are seen as bloated, outdated financial tools of an era lost to time. Although there are more than 8,000 hedge funds in operation today, Insider Monkey focuses on the bigwigs of this group, close to 525 funds. It is widely held that this group oversees the lion's share of all hedge funds' total assets, and by watching their best equity investments, we've figured out a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as useful, positive insider trading activity is another way to analyze the investments you're interested in. Obviously, there are a variety of motivations for an executive to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if shareholders know where to look (learn more here).
Keeping this in mind, we're going to discuss the newest info surrounding Viacom, Inc. (NASDAQ:VIAB).
Heading into Q3, a total of 47 of the hedge funds we track were long in this stock, a change of -4% from the previous quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly.
According to our 13F database, Donald Yacktman's Yacktman Asset Management had the biggest position in Viacom, Inc. (NASDAQ:VIAB), worth close to $681.7 million, comprising 3.2% of its total 13F portfolio. The second largest stake is held by Warren Buffett of Berkshire Hathaway, with a $517.5 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Mario Gabelli's GAMCO Investors, David Cohen and Harold Levy's Iridian Asset Management and Steven Cohen's SAC Capital Advisors.
Since Viacom, Inc. (NASDAQ:VIAB) has witnessed dropping sentiment from upper-tier hedge fund managers, logic holds that there lies a certain "tier" of hedge funds who sold off their full holdings in Q1. Interestingly, Philippe Laffont's Coatue Management dumped the largest investment of the "upper crust" of funds we track, comprising about $160.5 million in stock. Jacob Doft's fund, Highline Capital Management, also cut its stock, about $76.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 2 funds in Q1.
Bullish insider trading is particularly usable when the company we're looking at has experienced transactions within the past 180 days. Over the latest 180-day time period, Viacom, Inc. (NASDAQ:VIAB) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators 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 match VIAB's market cap.