We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (read our latest 10 coronavirus predictions).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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 fourth 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 years and analyze what the smart money thinks of Rogers Communications Inc. (NYSE:RCI) based on that data.
Rogers Communications Inc. (NYSE:RCI) was in 13 hedge funds’ portfolios at the end of the fourth quarter of 2019. RCI investors should be aware of a decrease in hedge fund interest lately. There were 23 hedge funds in our database with RCI positions at the end of the previous quarter. Our calculations also showed that RCI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings).
If you’d ask most stock holders, hedge funds are seen as worthless, outdated investment tools of years past. While there are over 8000 funds in operation today, Our experts hone in on the moguls of this group, approximately 850 funds. These investment experts handle most of all hedge funds’ total capital, and by following their best investments, Insider Monkey has deciphered a number of investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. 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 latest hedge fund action encompassing Rogers Communications Inc. (NYSE:RCI).
What does smart money think about Rogers Communications Inc. (NYSE:RCI)?
At the end of the fourth quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -43% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in RCI a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Rogers Communications Inc. (NYSE:RCI), which was worth $168.6 million at the end of the third quarter. On the second spot was Galibier Capital Management which amassed $32.6 million worth of shares. GLG Partners, Two Sigma Advisors, and GAMCO Investors 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 Galibier Capital Management allocated the biggest weight to Rogers Communications Inc. (NYSE:RCI), around 10.34% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, dishing out 0.19 percent of its 13F equity portfolio to RCI.
Seeing as Rogers Communications Inc. (NYSE:RCI) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their full holdings heading into Q4. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest investment of all the hedgies tracked by Insider Monkey, comprising close to $70.5 million in stock, and Sander Gerber’s Hudson Bay Capital Management was right behind this move, as the fund sold off about $8.3 million worth. These bearish behaviors are intriguing to say the least, 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 Rogers Communications Inc. (NYSE:RCI) but similarly valued. These stocks are First Republic Bank (NYSE:FRC), Imperial Oil Limited (NYSE:IMO), 0, and Seattle Genetics, Inc. (NASDAQ:SGEN). This group of stocks’ market valuations match RCI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FRC | 27 | 939192 | 7 |
| IMO | 10 | 35415 | -2 |
| TCOM | 31 | 1031564 | -8 |
| SGEN | 36 | 6196536 | 7 |
| Average | 26 | 2050677 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $2051 million. That figure was $314 million in RCI’s case. Seattle Genetics, Inc. (NASDAQ:SGEN) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 10 bullish hedge fund positions. Rogers Communications Inc. (NYSE:RCI) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 22.3% in 2020 through March 16th but still beat the market by 3.2 percentage points. A small number of hedge funds were also right about betting on RCI as the stock returned -18.6% during the same time period and outperformed the market by an even larger margin.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
