There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze CBS Corporation (NYSE:CBS).
Is CBS Corporation (NYSE:CBS) a sound investment right now? Prominent investors are getting more optimistic. The number of bullish hedge fund bets advanced by 1 lately. Our calculations also showed that cbs isn’t among the 30 most popular stocks among hedge funds. CBS was in 46 hedge funds’ portfolios at the end of the first quarter of 2019. There were 45 hedge funds in our database with CBS holdings at the end of the previous quarter.
To most traders, hedge funds are perceived as worthless, old investment tools of yesteryear. While there are over 8000 funds in operation at present, Our experts look at the aristocrats of this club, around 750 funds. These hedge fund managers orchestrate bulk of all hedge funds’ total asset base, and by keeping track of their best investments, Insider Monkey has unearthed a few investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
Let’s view the new hedge fund action surrounding CBS Corporation (NYSE:CBS).
How have hedgies been trading CBS Corporation (NYSE:CBS)?
Heading into the second quarter of 2019, a total of 46 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. By comparison, 33 hedge funds held shares or bullish call options in CBS a year ago. So, let’s check out 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, Baupost Group, managed by Seth Klarman, holds the number one position in CBS Corporation (NYSE:CBS). Baupost Group has a $406 million position in the stock, comprising 3.4% of its 13F portfolio. Coming in second is Glenview Capital, managed by Larry Robbins, which holds a $196.3 million position; 1.8% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism include Cliff Asness’s AQR Capital Management, Brett Barakett’s Tremblant Capital and Israel Englander’s Millennium Management.
As one would reasonably expect, key money managers have been driving this bullishness. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the most outsized position in CBS Corporation (NYSE:CBS). Adage Capital Management had $56.3 million invested in the company at the end of the quarter. James Dinan’s York Capital Management also made a $17.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies, Richard Rubin’s Hawkeye Capital, and David Fiszel’s Honeycomb Asset Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CBS Corporation (NYSE:CBS) but similarly valued. These stocks are POSCO (NYSE:PKX), IAC/InterActiveCorp (NASDAQ:IAC), Cheniere Energy, Inc. (NYSE:LNG), and Shinhan Financial Group Co., Ltd. (NYSE:SHG). This group of stocks’ market caps match CBS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PKX | 11 | 66584 | -4 |
| IAC | 51 | 2017916 | 1 |
| LNG | 53 | 5187506 | 7 |
| SHG | 4 | 11258 | -3 |
| Average | 29.75 | 1820816 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $1821 million. That figure was $1475 million in CBS’s case. Cheniere Energy, Inc. (NYSE:LNG) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 4 bullish hedge fund positions. CBS Corporation (NYSE:CBS) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on CBS, though not to the same extent, as the stock returned 1.4% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
