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Did Hedge Funds Drop The Ball On DISH Network Corp. (DISH) ?

The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards DISH Network Corp. (NASDAQ:DISH).

Is DISH Network Corp. (NASDAQ:DISH) a healthy stock for your portfolio? Money managers are in a bearish mood. The number of long hedge fund positions were cut by 10 recently. Our calculations also showed that DISH isn’t among the 30 most popular stocks among hedge funds. DISH was in 27 hedge funds’ portfolios at the end of the first quarter of 2019. There were 37 hedge funds in our database with DISH positions at the end of the previous quarter.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.

Scott Bessent of Key Square Capital Management

Let’s take a glance at the latest hedge fund action surrounding DISH Network Corp. (NASDAQ:DISH).

Hedge fund activity in DISH Network Corp. (NASDAQ:DISH)

Heading into the second quarter of 2019, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -27% from the fourth quarter of 2018. On the other hand, there were a total of 45 hedge funds with a bullish position in DISH a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

DISH_jun2019

Among these funds, King Street Capital held the most valuable stake in DISH Network Corp. (NASDAQ:DISH), which was worth $440.5 million at the end of the first quarter. On the second spot was Eagle Capital Management which amassed $395.2 million worth of shares. Moreover, Paulson & Co, Key Square Capital Management, and GAMCO Investors were also bullish on DISH Network Corp. (NASDAQ:DISH), allocating a large percentage of their portfolios to this stock.

Seeing as DISH Network Corp. (NASDAQ:DISH) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers that decided to sell off their entire stakes last quarter. It’s worth mentioning that Paul Singer’s Elliott Management said goodbye to the biggest position of the 700 funds monitored by Insider Monkey, totaling an estimated $46.6 million in stock. Matthew Knauer and Mina Faltas’s fund, Nokota Management, also sold off its stock, about $43.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 10 funds last quarter.

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. We will take a look at Altice USA, Inc. (NYSE:ATUS), Symantec Corporation (NASDAQ:SYMC), Evergy, Inc. (NYSE:EVRG), and KB Financial Group, Inc. (NYSE:KB). This group of stocks’ market caps are similar to DISH’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATUS 52 2522218 1
SYMC 29 1762346 -4
EVRG 24 925650 -1
KB 12 54461 6
Average 29.25 1316169 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $1316 million. That figure was $1306 million in DISH’s case. Altice USA, Inc. (NYSE:ATUS) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 12 bullish hedge fund positions. DISH Network Corp. (NASDAQ:DISH) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on DISH as the stock returned 9.7% during the same time frame and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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