At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards GCI Liberty, Inc. (NASDAQ:GLIBA).
GCI Liberty, Inc. (NASDAQ:GLIBA) has experienced an increase in support from the world’s most elite money managers in recent months. Our calculations also showed that GLIBA 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 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 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 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 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“. Also, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. 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. Now let’s review the recent hedge fund action encompassing GCI Liberty, Inc. (NASDAQ:GLIBA).
What does smart money think about GCI Liberty, Inc. (NASDAQ:GLIBA)?
At the end of the first quarter, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GLIBA over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, FPR Partners, managed by Bob Peck and Andy Raab, holds the biggest position in GCI Liberty, Inc. (NASDAQ:GLIBA). FPR Partners has a $442.8 million position in the stock, comprising 18.2% of its 13F portfolio. The second most bullish fund manager is Boykin Curry of Eagle Capital Management, with a $337.3 million position; 1.4% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions include Sander Gerber’s Hudson Bay Capital Management, Ben Gambill’s Tiger Eye Capital and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Tiger Eye Capital allocated the biggest weight to GCI Liberty, Inc. (NASDAQ:GLIBA), around 36.25% of its 13F portfolio. FPR Partners is also relatively very bullish on the stock, designating 18.2 percent of its 13F equity portfolio to GLIBA.
Now, key hedge funds were leading the bulls’ herd. Jericho Capital Asset Management, managed by Josh Resnick, initiated the most valuable position in GCI Liberty, Inc. (NASDAQ:GLIBA). Jericho Capital Asset Management had $50.1 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $11.1 million position during the quarter. The other funds with brand new GLIBA positions are Steve Pigott’s Fort Baker Capital Management, Zach Petrone’s Highside Global Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now take a look at hedge fund activity in other stocks similar to GCI Liberty, Inc. (NASDAQ:GLIBA). We will take a look at BanColombia S.A. (NYSE:CIB), Formula One Group (NASDAQ:FWONA), Albemarle Corporation (NYSE:ALB), and Vail Resorts, Inc. (NYSE:MTN). All of these stocks’ market caps are closest to GLIBA’s market cap.
|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 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $249 million. That figure was $1834 million in GLIBA’s case. Vail Resorts, Inc. (NYSE:MTN) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks GCI Liberty, Inc. (NASDAQ:GLIBA) is more popular among hedge funds. 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 but still managed to beat the market by 15.6 percentage points. Hedge funds were also right about betting on GLIBA, though not to the same extent, as the stock returned 15.6% in Q2 (through May 22nd) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.