The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded SBA Communications Corporation (NASDAQ:SBAC) based on those filings.
Is SBAC a good stock to buy now? SBA Communications Corporation (NASDAQ:SBAC) was in 43 hedge funds’ portfolios at the end of September. The all time high for this statistic is 57. SBAC investors should pay attention to a decrease in hedge fund sentiment lately. There were 57 hedge funds in our database with SBAC holdings at the end of June. Our calculations also showed that SBAC 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.
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 cannabis tech 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 let’s review the new hedge fund action regarding SBA Communications Corporation (NASDAQ:SBAC).
Do Hedge Funds Think SBAC Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SBAC over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Among these funds, Akre Capital Management held the most valuable stake in SBA Communications Corporation (NASDAQ:SBAC), which was worth $785.1 million at the end of the third quarter. On the second spot was D E Shaw which amassed $148.9 million worth of shares. Two Sigma Advisors, Melvin Capital Management, and Tremblant Capital 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 Portsea Asset Management allocated the biggest weight to SBA Communications Corporation (NASDAQ:SBAC), around 24.4% of its 13F portfolio. Land & Buildings Investment Management is also relatively very bullish on the stock, dishing out 8.2 percent of its 13F equity portfolio to SBAC.
Because SBA Communications Corporation (NASDAQ:SBAC) has experienced bearish sentiment from hedge fund managers, we can see that there is a sect of funds that decided to sell off their full holdings heading into Q4. At the top of the heap, Ken Griffin’s Citadel Investment Group dumped the largest position of the 750 funds tracked by Insider Monkey, worth close to $223.2 million in stock, and Brandon Haley’s Holocene Advisors was right behind this move, as the fund dumped about $113.1 million worth. These transactions are important to note, as total hedge fund interest was cut by 14 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to SBA Communications Corporation (NASDAQ:SBAC). We will take a look at Las Vegas Sands Corp. (NYSE:LVS), Baidu, Inc. (NASDAQ:BIDU), Ambev SA (NYSE:ABEV), Vodafone Group Plc (NASDAQ:VOD), Twilio Inc. (NYSE:TWLO), ConocoPhillips (NYSE:COP), and Twitter Inc (NYSE:TWTR). All of these stocks’ market caps match SBAC’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 46.3 hedge funds with bullish positions and the average amount invested in these stocks was $1782 million. That figure was $1761 million in SBAC’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Ambev SA (NYSE:ABEV) is the least popular one with only 21 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 overall hedge fund sentiment score for SBAC is 34. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately SBAC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SBAC investors were disappointed as the stock returned -11.7% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.