Hedge Funds Were Cashing Out Of Comcast Corporation (CMCSA) During The Crash

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 Comcast Corporation (NASDAQ:CMCSA) based on that data.

Is Comcast Corporation (NASDAQ:CMCSA) ready to rally soon? Hedge funds are taking a bearish view. The number of bullish hedge fund bets fell by 4 lately. Our calculations also showed that CMCSA 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.

At the moment there are dozens of metrics stock traders have at their disposal to evaluate publicly traded companies. A couple of the best metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite money managers can outperform the market by a healthy margin (see the details here).


Boykin Curry of Eagle Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea.  For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we asked astrophysicist Neil deGrasse Tyson about Tesla, Elon Musk, and his top stock picks. 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. Keeping this in mind we’re going to take a gander at the recent hedge fund action regarding Comcast Corporation (NASDAQ:CMCSA).

What have hedge funds been doing with Comcast Corporation (NASDAQ:CMCSA)?

At the end of the first quarter, a total of 83 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in CMCSA over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Is CMCSA A Good Stock To Buy?

The largest stake in Comcast Corporation (NASDAQ:CMCSA) was held by Eagle Capital Management, which reported holding $1510.2 million worth of stock at the end of September. It was followed by Viking Global with a $615.5 million position. Other investors bullish on the company included First Pacific Advisors LLC, Orbis Investment Management, and SRS Investment Management. In terms of the portfolio weights assigned to each position 3G Sahana Capital Management allocated the biggest weight to Comcast Corporation (NASDAQ:CMCSA), around 31.37% of its 13F portfolio. BlueDrive Global Investors is also relatively very bullish on the stock, designating 20.53 percent of its 13F equity portfolio to CMCSA.

Judging by the fact that Comcast Corporation (NASDAQ:CMCSA) has experienced a decline in interest from hedge fund managers, logic holds that there was a specific group of hedgies who were dropping their full holdings in the third quarter. Intriguingly, Tim Hurd and Ed Magnus’s BlueSpruce Investments dumped the biggest stake of all the hedgies tracked by Insider Monkey, totaling about $318.7 million in stock, and Jorge Paulo Lemann’s 3G Capital was right behind this move, as the fund sold off about $184.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Comcast Corporation (NASDAQ:CMCSA). We will take a look at China Mobile Limited (NYSE:CHL), Adobe Inc. (NASDAQ:ADBE), Oracle Corporation (NASDAQ:ORCL), and Novo Nordisk A/S (NYSE:NVO). This group of stocks’ market caps match CMCSA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHL 11 449753 -1
ADBE 115 8180671 9
ORCL 48 2437677 -11
NVO 24 3036975 1
Average 49.5 3526269 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 49.5 hedge funds with bullish positions and the average amount invested in these stocks was $3526 million. That figure was $5539 million in CMCSA’s case. Adobe Inc. (NASDAQ:ADBE) is the most popular stock in this table. On the other hand China Mobile Limited (NYSE:CHL) is the least popular one with only 11 bullish hedge fund positions. Comcast Corporation (NASDAQ:CMCSA) is not the most popular stock in this group but hedge fund interest is still above average. 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 7.9% in 2020 through May 22nd but beat the market by 15.6 percentage points. Unfortunately CMCSA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CMCSA were disappointed as the stock returned 12.7% 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.