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Hedge Funds Started Cashing Out Of ViacomCBS Inc. (VIAC)

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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of ViacomCBS Inc. (NASDAQ:VIAC).

ViacomCBS Inc. (NASDAQ:VIAC) shareholders have witnessed a decrease in enthusiasm from smart money lately. Our calculations also showed that VIAC 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Joe Huber - Huber Capital Management

Joe Huber of Huber Capital 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 analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s analyze the key hedge fund action regarding ViacomCBS Inc. (NASDAQ:VIAC).

How are hedge funds trading ViacomCBS Inc. (NASDAQ:VIAC)?

Heading into the second quarter of 2020, a total of 54 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in VIAC 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.

When looking at the institutional investors followed by Insider Monkey, Seth Klarman’s Baupost Group has the largest position in ViacomCBS Inc. (NASDAQ:VIAC), worth close to $315.2 million, comprising 4.7% of its total 13F portfolio. On Baupost Group’s heels is Larry Robbins of Glenview Capital, with a $130.1 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass John W. Rogers’s Ariel Investments, John Paulson’s Paulson & Co and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Meru Capital allocated the biggest weight to ViacomCBS Inc. (NASDAQ:VIAC), around 5.27% of its 13F portfolio. Baupost Group is also relatively very bullish on the stock, earmarking 4.65 percent of its 13F equity portfolio to VIAC.

Due to the fact that ViacomCBS Inc. (NASDAQ:VIAC) has experienced bearish sentiment from the smart money, we can see that there lies a certain “tier” of funds who sold off their positions entirely heading into Q4. It’s worth mentioning that Brett Barakett’s Tremblant Capital said goodbye to the biggest investment of all the hedgies monitored by Insider Monkey, worth close to $154.9 million in stock, and Dan Loeb’s Third Point was right behind this move, as the fund dropped about $115.4 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 10 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as ViacomCBS Inc. (NASDAQ:VIAC) but similarly valued. These stocks are Regions Financial Corporation (NYSE:RF), Universal Health Services, Inc. (NYSE:UHS), EXACT Sciences Corporation (NASDAQ:EXAS), and Allegion plc (NYSE:ALLE). This group of stocks’ market values match VIAC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RF 37 235284 0
UHS 30 443724 -1
EXAS 34 514351 -7
ALLE 31 404344 6
Average 33 399426 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $399 million. That figure was $953 million in VIAC’s case. Regions Financial Corporation (NYSE:RF) is the most popular stock in this table. On the other hand Universal Health Services, Inc. (NYSE:UHS) is the least popular one with only 30 bullish hedge fund positions. Compared to these stocks ViacomCBS Inc. (NASDAQ:VIAC) 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 returned 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 VIAC as the stock returned 39.8% so far in Q2 (through May 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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