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Is SBA Communications Corporation (SBAC) Going to Burn These Hedge Funds?

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards SBA Communications Corporation (NASDAQ:SBAC).

Is SBA Communications Corporation (NASDAQ:SBAC) a buy right now? The best stock pickers are in an optimistic mood. The number of long hedge fund positions moved up by 2 recently. Our calculations also showed that SBAC isn’t among the 30 most popular stocks among hedge funds.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to 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 hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

SBAC_oct2019

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the recent hedge fund action encompassing SBA Communications Corporation (NASDAQ:SBAC).

How have hedgies been trading SBA Communications Corporation (NASDAQ:SBAC)?

Heading into the third quarter of 2019, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in SBAC over the last 16 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

Harold Levy Iridian Asset Management

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Charles Akre’s Akre Capital Management has the number one position in SBA Communications Corporation (NASDAQ:SBAC), worth close to $554.2 million, accounting for 5.6% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, holding a $364.1 million position; 0.3% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish contain John Overdeck and David Siegel’s Two Sigma Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Israel Englander’s Millennium Management.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Voleon Capital, managed by Michael Kharitonov and Jon David McAuliffe, initiated the most outsized position in SBA Communications Corporation (NASDAQ:SBAC). Voleon Capital had $11.2 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $7.6 million investment in the stock during the quarter. The other funds with new positions in the stock are David Cohen and Harold Levy’s Iridian Asset Management, Jeffrey Talpins’s Element Capital Management, and Michael Gelband’s ExodusPoint Capital.

Let’s also examine hedge fund activity in other stocks similar to SBA Communications Corporation (NASDAQ:SBAC). We will take a look at TransDigm Group Incorporated (NYSE:TDG), IHS Markit Ltd. (NYSE:INFO), Dollar Tree, Inc. (NASDAQ:DLTR), and T. Rowe Price Group, Inc. (NASDAQ:TROW). This group of stocks’ market caps resemble SBAC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TDG 48 5078289 -4
INFO 28 998482 -2
DLTR 49 2013841 1
TROW 30 330195 4
Average 38.75 2105202 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 38.75 hedge funds with bullish positions and the average amount invested in these stocks was $2105 million. That figure was $1594 million in SBAC’s case. Dollar Tree, Inc. (NASDAQ:DLTR) is the most popular stock in this table. On the other hand IHS Markit Ltd. (NYSE:INFO) is the least popular one with only 28 bullish hedge fund positions. SBA Communications Corporation (NASDAQ:SBAC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on SBAC as the stock returned 7.4% during the same time frame and outperformed the market by an even larger margin.

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

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