How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Comcast Corporation (NASDAQ:CMCSA).
Is Comcast (CMCSA) stock a buy or sell? Money managers were buying. The number of bullish hedge fund bets increased by 2 lately. Comcast Corporation (NASDAQ:CMCSA) was in 84 hedge funds’ portfolios at the end of December. The all time high for this statistic is 105. Our calculations also showed that CMCSA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In today’s marketplace there are plenty of indicators market participants employ to assess publicly traded companies. A couple of the most underrated indicators are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outperform the S&P 500 by a superb margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. 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 homepage (or at the end of this article). Keeping this in mind let’s check out the latest hedge fund action encompassing Comcast Corporation (NASDAQ:CMCSA).
Do Hedge Funds Think CMCSA Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 84 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CMCSA over the last 22 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Boykin Curry’s Eagle Capital Management has the biggest position in Comcast Corporation (NASDAQ:CMCSA), worth close to $2.1979 billion, corresponding to 7% of its total 13F portfolio. The second most bullish fund manager is Nelson Peltz of Trian Partners, with a $1.0406 billion position; the fund has 15.4% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish encompass William B. Gray’s Orbis Investment Management, John Armitage’s Egerton Capital Limited and Eric W. Mandelblatt and Gaurav Kapadia’s Soroban Capital Partners. In terms of the portfolio weights assigned to each position 3G Sahana Capital Management allocated the biggest weight to Comcast Corporation (NASDAQ:CMCSA), around 27.43% of its 13F portfolio. JNE Partners is also relatively very bullish on the stock, designating 23 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. Holocene Advisors, managed by Brandon Haley, initiated the biggest position in Comcast Corporation (NASDAQ:CMCSA). Holocene Advisors had $146.8 million invested in the company at the end of the quarter. Patrick Degorce’s Theleme Partners also made a $117.5 million investment in the stock during the quarter. The other funds with brand new CMCSA positions are David Fiszel’s Honeycomb Asset Management, Frank Fu’s CaaS Capital, and Pasco Alfaro and Richard Turnure’s Miura Global Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Comcast Corporation (NASDAQ:CMCSA) but similarly valued. These stocks are Netflix, Inc. (NASDAQ:NFLX), The Coca-Cola Company (NYSE:KO), NIKE, Inc. (NYSE:NKE), Pinduoduo Inc. (NASDAQ:PDD), Toyota Motor Corporation (NYSE:TM), Novartis AG (NYSE:NVS), and Merck & Co., Inc. (NYSE:MRK). This group of stocks’ market caps are closest to CMCSA’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 61.4 hedge funds with bullish positions and the average amount invested in these stocks was $9540 million. That figure was $8832 million in CMCSA’s case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) 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. Our overall hedge fund sentiment score for CMCSA is 65.8. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on CMCSA as the stock returned 9.4% since the end of Q4 (through 3/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.