Is Comcast Corporation (CMCSA) Going to Burn These Hedge Funds?

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Comcast Corporation (NASDAQ:CMCSA).

Comcast Corporation (NASDAQ:CMCSA) was in 88 hedge funds’ portfolios at the end of March. The all time high for this statistic is 105. CMCSA investors should be aware of an increase in support from the world’s most elite money managers lately. There were 84 hedge funds in our database with CMCSA holdings at the end of December. Our calculations also showed that CMCSA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Boykin Curry of Eagle Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. 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. Keeping this in mind let’s take a glance at the recent hedge fund action surrounding Comcast Corporation (NASDAQ:CMCSA).

Do Hedge Funds Think CMCSA Is A Good Stock To Buy Now?

At the end of March, a total of 88 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the previous quarter. By comparison, 83 hedge funds held shares or bullish call options in CMCSA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CMCSA A Good Stock To Buy?

Among these funds, Eagle Capital Management held the most valuable stake in Comcast Corporation (NASDAQ:CMCSA), which was worth $2063 million at the end of the fourth quarter. On the second spot was Trian Partners which amassed $1074.5 million worth of shares. Orbis Investment Management, Arrowstreet Capital, 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 JNE Partners allocated the biggest weight to Comcast Corporation (NASDAQ:CMCSA), around 19.16% of its 13F portfolio. 3G Sahana Capital Management is also relatively very bullish on the stock, earmarking 17.56 percent of its 13F equity portfolio to CMCSA.

As one would reasonably expect, key hedge funds have jumped into Comcast Corporation (NASDAQ:CMCSA) headfirst. Darsana Capital Partners, managed by Anand Desai, assembled the most outsized position in Comcast Corporation (NASDAQ:CMCSA). Darsana Capital Partners had $162.3 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also initiated a $52.7 million position during the quarter. The other funds with brand new CMCSA positions are Michael Gelband’s ExodusPoint Capital, Renaissance Technologies, and Scott Bessent’s Key Square Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Comcast Corporation (NASDAQ:CMCSA) but similarly valued. These stocks are Verizon Communications Inc. (NYSE:VZ), Exxon Mobil Corporation (NYSE:XOM), Netflix, Inc. (NASDAQ:NFLX), Adobe Inc. (NASDAQ:ADBE), The Coca-Cola Company (NYSE:KO), Cisco Systems, Inc. (NASDAQ:CSCO), and Toyota Motor Corporation (NYSE:TM). This group of stocks’ market values match CMCSA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VZ 69 11383576 2
XOM 65 2770198 2
NFLX 110 14159343 -6
ADBE 107 12111692 -7
KO 61 24903946 -1
CSCO 59 5194074 -1
TM 18 824174 7
Average 69.9 10192429 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 69.9 hedge funds with bullish positions and the average amount invested in these stocks was $10192 million. That figure was $9762 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 18 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 72.2. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately CMCSA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CMCSA were disappointed as the stock returned 5.6% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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