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Here is What Hedge Funds Think About Sabre Corporation (SABR)

The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Sabre Corporation (NASDAQ:SABR).

Is Sabre Corporation (NASDAQ:SABR) a buy right now? Hedge funds are getting less bullish. The number of long hedge fund bets fell by 3 in recent months. Our calculations also showed that sabr isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Jeffrey Talpins Element Capital

We’re going to check out the fresh hedge fund action surrounding Sabre Corporation (NASDAQ:SABR).

What have hedge funds been doing with Sabre Corporation (NASDAQ:SABR)?

Heading into the second quarter of 2019, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SABR over the last 15 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

No of Hedge Funds with SABR Positions

Of the funds tracked by Insider Monkey, Jeffrey Talpins’s Element Capital Management has the largest position in Sabre Corporation (NASDAQ:SABR), worth close to $53.2 million, corresponding to 1.6% of its total 13F portfolio. On Element Capital Management’s heels is Echo Street Capital Management, led by Greg Poole, holding a $33.7 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions contain Martin D. Sass’s MD Sass, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Judging by the fact that Sabre Corporation (NASDAQ:SABR) has faced a decline in interest from hedge fund managers, logic holds that there was a specific group of money managers that elected to cut their full holdings by the end of the third quarter. Intriguingly, Guy Shahar’s DSAM Partners said goodbye to the biggest position of the 700 funds watched by Insider Monkey, valued at about $7.5 million in stock. Minhua Zhang’s fund, Weld Capital Management, also cut its stock, about $1 million worth. These moves are interesting, as total hedge fund interest fell by 3 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Sabre Corporation (NASDAQ:SABR). We will take a look at Woodward Inc (NASDAQ:WWD), LPL Financial Holdings Inc (NASDAQ:LPLA), CAE, Inc. (NYSE:CAE), and GCI Liberty, Inc. (NASDAQ:GLIBA). All of these stocks’ market caps are closest to SABR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WWD 20 268959 6
LPLA 33 807308 -1
CAE 10 117527 1
GLIBA 36 1903190 -1
Average 24.75 774246 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $774 million. That figure was $261 million in SABR’s case. GCI Liberty, Inc. (NASDAQ:GLIBA) is the most popular stock in this table. On the other hand CAE, Inc. (NYSE:CAE) is the least popular one with only 10 bullish hedge fund positions. Sabre Corporation (NASDAQ:SABR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately SABR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SABR investors were disappointed as the stock returned -4.5% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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

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