Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Qurate Retail, Inc. (NASDAQ:QRTEA) in this article.
Is QRTEA a good stock to buy now? Money managers were reducing their bets on the stock. The number of bullish hedge fund positions retreated by 2 recently. Qurate Retail, Inc. (NASDAQ:QRTEA) was in 41 hedge funds’ portfolios at the end of September. The all time high for this statistic is 43. Our calculations also showed that QRTEA 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). There were 43 hedge funds in our database with QRTEA holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis 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. Now we’re going to take a glance at the recent hedge fund action encompassing Qurate Retail, Inc. (NASDAQ:QRTEA).
Do Hedge Funds Think QRTEA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. By comparison, 35 hedge funds held shares or bullish call options in QRTEA 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.
Of the funds tracked by Insider Monkey, Bob Peck and Andy Raab’s FPR Partners has the largest position in Qurate Retail, Inc. (NASDAQ:QRTEA), worth close to $122.3 million, corresponding to 4.2% of its total 13F portfolio. Coming in second is Andrew Wellington and Jeff Keswin of Lyrical Asset Management, with a $92.2 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism comprise Cliff Asness’s AQR Capital Management, Stephen Mildenhall’s Contrarius Investment Management and Thomas Bancroft’s Makaira Partners. In terms of the portfolio weights assigned to each position Makaira Partners allocated the biggest weight to Qurate Retail, Inc. (NASDAQ:QRTEA), around 9.98% of its 13F portfolio. General Equity Partners is also relatively very bullish on the stock, earmarking 7.07 percent of its 13F equity portfolio to QRTEA.
Due to the fact that Qurate Retail, Inc. (NASDAQ:QRTEA) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedge funds that slashed their full holdings heading into Q4. Interestingly, Gavin M. Abrams’s Abrams Bison Investments sold off the biggest position of all the hedgies tracked by Insider Monkey, totaling an estimated $94.5 million in stock. Donald Yacktman’s fund, Yacktman Asset Management, also sold off its stock, about $32.3 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Qurate Retail, Inc. (NASDAQ:QRTEA) but similarly valued. We will take a look at M.D.C. Holdings, Inc. (NYSE:MDC), Braskem SA (NYSE:BAK), Mimecast Limited (NASDAQ:MIME), Nektar Therapeutics (NASDAQ:NKTR), Open Lending Corporation (NASDAQ:LPRO), Dorman Products Inc. (NASDAQ:DORM), and Diodes Incorporated (NASDAQ:DIOD). This group of stocks’ market caps are similar to QRTEA’s market cap.
|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 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $157 million. That figure was $608 million in QRTEA’s case. M.D.C. Holdings, Inc. (NYSE:MDC) is the most popular stock in this table. On the other hand Braskem SA (NYSE:BAK) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Qurate Retail, Inc. (NASDAQ:QRTEA) is more popular among hedge funds. Our overall hedge fund sentiment score for QRTEA is 81.6. 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 returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on QRTEA as the stock returned 67.3% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.