After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Comcast Corporation (NASDAQ:CMCSA).
Is Comcast Corporation (NASDAQ:CMCSA) a good stock to buy now? CMCSA was in 82 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 105. CMCSA investors should pay attention to an increase in hedge fund sentiment lately. There were 80 hedge funds in our database with CMCSA holdings at the end of June. Our calculations also showed that CMCSA isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let’s take a glance at the recent hedge fund action encompassing Comcast Corporation (NASDAQ:CMCSA).
Hedge fund activity in Comcast Corporation (NASDAQ:CMCSA)
Heading into the fourth quarter of 2020, a total of 82 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. On the other hand, there were a total of 90 hedge funds with a bullish position in CMCSA a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Eagle Capital Management held the most valuable stake in Comcast Corporation (NASDAQ:CMCSA), which was worth $2039.1 million at the end of the third quarter. On the second spot was Orbis Investment Management which amassed $751.2 million worth of shares. Trian Partners, Egerton Capital Limited, and First Pacific Advisors LLC 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 3G Sahana Capital Management allocated the biggest weight to Comcast Corporation (NASDAQ:CMCSA), around 30.35% of its 13F portfolio. JNE Partners is also relatively very bullish on the stock, designating 14.45 percent of its 13F equity portfolio to CMCSA.
With a general bullishness amongst the heavyweights, key money managers have jumped into Comcast Corporation (NASDAQ:CMCSA) headfirst. Trian Partners, managed by Nelson Peltz, created the biggest position in Comcast Corporation (NASDAQ:CMCSA). Trian Partners had $723 million invested in the company at the end of the quarter. John Armitage’s Egerton Capital Limited also initiated a $511.7 million position during the quarter. The other funds with brand new CMCSA positions are James Parsons’s Junto Capital Management, Alan Fournier’s Pennant Capital Management, and Michael Rockefeller and KarláKroeker’s Woodline Partners.
Let’s go over hedge fund activity in other stocks similar to Comcast Corporation (NASDAQ:CMCSA). We will take a look at Merck & Co., Inc. (NYSE:MRK), Bank of America Corporation (NYSE:BAC), Pfizer Inc. (NYSE:PFE), AT&T Inc. (NYSE:T), Novartis AG (NYSE:NVS), NIKE, Inc. (NYSE:NKE), and Abbott Laboratories (NYSE:ABT). This group of stocks’ market valuations are similar to CMCSA’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 63.9 hedge funds with bullish positions and the average amount invested in these stocks was $6640 million. That figure was $8149 million in CMCSA’s case. Bank of America Corporation (NYSE:BAC) is the most popular stock in this table. On the other hand Novartis AG (NYSE:NVS) is the least popular one with only 25 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. Our overall hedge fund sentiment score for CMCSA is 75.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on CMCSA as the stock returned 12.4% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.