Hedge Funds Are Nibbling On SBA Communications Corporation (SBAC)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of SBA Communications Corporation (NASDAQ:SBAC) based on that data.

Is SBA Communications Corporation (NASDAQ:SBAC) a great investment right now? Money managers are getting more optimistic. The number of bullish hedge fund positions improved by 1 recently. Our calculations also showed that SBAC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the latest hedge fund action surrounding SBA Communications Corporation (NASDAQ:SBAC).

What does smart money think about SBA Communications Corporation (NASDAQ:SBAC)?

Heading into the second quarter of 2020, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SBAC over the last 18 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is SBAC A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Charles Akre’s Akre Capital Management has the biggest position in SBA Communications Corporation (NASDAQ:SBAC), worth close to $665.5 million, accounting for 6.5% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, holding a $279.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism encompass Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Portsea Asset Management allocated the biggest weight to SBA Communications Corporation (NASDAQ:SBAC), around 51.45% of its 13F portfolio. Land & Buildings Investment Management is also relatively very bullish on the stock, earmarking 14.95 percent of its 13F equity portfolio to SBAC.

Consequently, specific money managers have jumped into SBA Communications Corporation (NASDAQ:SBAC) headfirst. Portsea Asset Management, managed by Cyrus de Weck, established the biggest position in SBA Communications Corporation (NASDAQ:SBAC). Portsea Asset Management had $57.1 million invested in the company at the end of the quarter. Brett Barakett’s Tremblant Capital also made a $39.4 million investment in the stock during the quarter. The other funds with brand new SBAC positions are Dmitry Balyasny’s Balyasny Asset Management, Charles Clough’s Clough Capital Partners, and Mark Coe’s Intrinsic Edge Capital.

Let’s also examine hedge fund activity in other stocks similar to SBA Communications Corporation (NASDAQ:SBAC). These stocks are Monster Beverage Corp (NASDAQ:MNST), The Kraft Heinz Company (NASDAQ:KHC), General Motors Company (NYSE:GM), and Workday Inc (NYSE:WDAY). This group of stocks’ market valuations are similar to SBAC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MNST 43 1843978 -2
KHC 39 8314956 5
GM 53 3020405 -22
WDAY 58 2259501 3
Average 48.25 3859710 -4

View table here if you experience formatting issues.

As you can see these stocks had an average of 48.25 hedge funds with bullish positions and the average amount invested in these stocks was $3860 million. That figure was $1835 million in SBAC’s case. Workday Inc (NYSE:WDAY) is the most popular stock in this table. On the other hand The Kraft Heinz Company (NASDAQ:KHC) is the least popular one with only 39 bullish hedge fund positions. SBA Communications Corporation (NASDAQ:SBAC) is not the least popular stock in this group but hedge fund interest is still below average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd and surpassed the market by 15.6 percentage points. Unfortunately SBAC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); SBAC investors were disappointed as the stock returned 7.4% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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