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Do Hedge Funds Love Comcast Corporation (CMCSA)?

It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Comcast Corporation (NASDAQ:CMCSA) during the quarter below.

Comcast Corporation (NASDAQ:CMCSA) was in an 80 hedge funds’ portfolios at the end of September. CMCSA shareholders have witnessed an increase in hedge fund sentiment of late. There were 76 hedge funds in our database with CMCSA holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as International Business Machines Corp. (NYSE:IBM), Merck & Co., Inc. (NYSE:MRK), and PepsiCo, Inc. (NYSE:PEP) to gather more data points.

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In the eyes of most market participants, hedge funds are assumed to be slow, old financial vehicles of the past. While there are more than 8000 funds trading at present, We hone in on the top tier of this group, approximately 700 funds. Most estimates calculate that this group of people have their hands on the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their first-class equity investments, Insider Monkey has discovered a number of investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, let’s take a look at the fresh action surrounding Comcast Corporation (NASDAQ:CMCSA).

How have hedgies been trading Comcast Corporation (NASDAQ:CMCSA)?

At the end of the third quarter, a total of an 80 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 5% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the number one position in Comcast Corporation (NASDAQ:CMCSA), worth close to $696.3 million, accounting for 1.5% of its total 13F portfolio. On Fisher Asset Management’s heels is OZ Management, run by Daniel S. Och, which holds a $543.1 million position; 1.9% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions consist of John Armitage’s Egerton Capital Limited, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Now, key money managers have jumped into Comcast Corporation (NASDAQ:CMCSA) headfirst. Ascend Capital, managed by Malcolm Fairbairn, assembled the most valuable position in Comcast Corporation (NASDAQ:CMCSA). The fund reportedly had $86.1 million invested in the company at the end of the quarter. Howard Guberman’s Gruss Asset Management also made a $85.3 million investment in the stock during the quarter. The other funds with brand new CMCSA positions are Michael Hintze’s CQS Cayman LP, Matthew Mark’s Jet Capital Investors, and Jane Mendillo’s Harvard Management Co.

Let’s now take a look at hedge fund activity in other stocks similar to Comcast Corporation (NASDAQ:CMCSA). These stocks are International Business Machines Corp. (NYSE:IBM), Merck & Co., Inc. (NYSE:MRK), PepsiCo, Inc. (NYSE:PEP), and Cisco Systems, Inc. (NASDAQ:CSCO). This group of stocks’ market values match CMCSA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IBM 63 13494699 4
MRK 62 2250136 -12
PEP 57 6739297 0
CSCO 67 4240851 -5

As you can see these stocks had an average of 62 hedge funds with bullish positions and the average amount invested in these stocks was $6.68 billion. That figure was $8.57 billion in CMCSA’s case. Cisco Systems, Inc. (NASDAQ:CSCO) is the most popular stock in this table. On the other hand PepsiCo, Inc. (NYSE:PEP) is the least popular one with only 57 bullish hedge fund positions. Comcast Corporation (NASDAQ:CMCSA) is miles ahead, having registered 80 long hedge fund positions at the end of the quarter. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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