The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Cable One Inc (NYSE:CABO) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Cable One Inc (NYSE:CABO) has experienced an increase in hedge fund sentiment of late. Cable One Inc (NYSE:CABO) was in 23 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 27. Our calculations also showed that CABO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 S&P 500 ETFs by 115 percentage points since March 2017 (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.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a look at the key hedge fund action regarding Cable One Inc (NYSE:CABO).
Do Hedge Funds Think CABO Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 35% from the fourth quarter of 2020. By comparison, 23 hedge funds held shares or bullish call options in CABO a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Cable One Inc (NYSE:CABO) was held by Renaissance Technologies, which reported holding $360.6 million worth of stock at the end of December. It was followed by Gardner Russo & Gardner with a $142 million position. Other investors bullish on the company included Wallace Capital Management, Wallace Capital Management, and AQR Capital Management. In terms of the portfolio weights assigned to each position Wallace Capital Management allocated the biggest weight to Cable One Inc (NYSE:CABO), around 8.18% of its 13F portfolio. Wallace Capital Management is also relatively very bullish on the stock, designating 8.18 percent of its 13F equity portfolio to CABO.
Consequently, key money managers were breaking ground themselves. Laurion Capital Management, managed by Benjamin A. Smith, established the most valuable position in Cable One Inc (NYSE:CABO). Laurion Capital Management had $3 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $2.6 million investment in the stock during the quarter. The other funds with brand new CABO positions are Paul Tudor Jones’s Tudor Investment Corp, Alec Litowitz and Ross Laser’s Magnetar Capital, and Donald Sussman’s Paloma Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Cable One Inc (NYSE:CABO) but similarly valued. These stocks are Camden Property Trust (NYSE:CPT), Essential Utilities Inc (NYSE:WTRG), A. O. Smith Corporation (NYSE:AOS), Apollo Global Management Inc (NYSE:APO), Lear Corporation (NYSE:LEA), Credicorp Ltd. (NYSE:BAP), and AGCO Corporation (NYSE:AGCO). This group of stocks’ market valuations are similar to CABO’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 27.4 hedge funds with bullish positions and the average amount invested in these stocks was $810 million. That figure was $695 million in CABO’s case. Apollo Global Management Inc (NYSE:APO) is the most popular stock in this table. On the other hand Essential Utilities Inc (NYSE:WTRG) is the least popular one with only 19 bullish hedge fund positions. Cable One Inc (NYSE:CABO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CABO is 43.6. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately CABO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CABO investors were disappointed as the stock returned 3.4% since the end of March (through 7/16) 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 most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.