We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards DISH Network Corp. (NASDAQ:DISH) and determine whether hedge funds skillfully traded this stock.
DISH Network Corp. (NASDAQ:DISH) has experienced an increase in hedge fund sentiment of late. DISH Network Corp. (NASDAQ:DISH) was in 54 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 58. There were 44 hedge funds in our database with DISH holdings at the end of March. Our calculations also showed that DISH isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
If you’d ask most stock holders, hedge funds are seen as unimportant, outdated financial vehicles of yesteryear. While there are over 8000 funds with their doors open today, Our researchers hone in on the aristocrats of this club, approximately 850 funds. These money managers preside over most of all hedge funds’ total asset base, and by watching their best stock picks, Insider Monkey has spotted various investment strategies that have historically surpassed the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock.. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. With all of this in mind we’re going to review the new hedge fund action encompassing DISH Network Corp. (NASDAQ:DISH).
What does smart money think about DISH Network Corp. (NASDAQ:DISH)?
Heading into the third quarter of 2020, a total of 54 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DISH over the last 20 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, King Street Capital held the most valuable stake in DISH Network Corp. (NASDAQ:DISH), which was worth $255.2 million at the end of the third quarter. On the second spot was Jericho Capital Asset Management which amassed $234 million worth of shares. Eagle Capital Management, Palestra Capital Management, and Paulson & Co were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to DISH Network Corp. (NASDAQ:DISH), around 25.66% of its 13F portfolio. King Street Capital is also relatively very bullish on the stock, earmarking 22.56 percent of its 13F equity portfolio to DISH.
As aggregate interest increased, some big names have jumped into DISH Network Corp. (NASDAQ:DISH) headfirst. Jericho Capital Asset Management, managed by Josh Resnick, assembled the most valuable position in DISH Network Corp. (NASDAQ:DISH). Jericho Capital Asset Management had $234 million invested in the company at the end of the quarter. Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management also initiated a $188 million position during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Mark Moore’s ThornTree Capital Partners, and Benjamin Pass’s TOMS Capital.
Let’s go over 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 Chewy, Inc. (NYSE:CHWY), Delta Air Lines, Inc. (NYSE:DAL), Fortis Inc. (NYSE:FTS), PG&E Corporation (NYSE:PCG), Slack Technologies Inc (NYSE:WORK), Akamai Technologies, Inc. (NASDAQ:AKAM), and Ameren Corporation (NYSE:AEE). This group of stocks’ market valuations resemble DISH’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.1 hedge funds with bullish positions and the average amount invested in these stocks was $1142 million. That figure was $1703 million in DISH’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand Fortis Inc. (NYSE:FTS) is the least popular one with only 8 bullish hedge fund positions. DISH Network Corp. (NASDAQ:DISH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DISH is 65.3. 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 positive signal but 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 28.2% in 2020 through August 24th but beat the market by 20.6 percentage points. Unfortunately DISH wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on DISH were disappointed as the stock returned 0.2% during the same time period 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.