In this article we will take a look at whether hedge funds think Shaw Communications Inc (NYSE:SJR) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is SJR a good stock to buy now? Shaw Communications Inc (NYSE:SJR) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that SJR 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). At the end of this article we will also compare SJR to other stocks including Huntington Bancshares Incorporated (NASDAQ:HBAN), Medical Properties Trust, Inc. (NYSE:MPW), and Elastic N.V. (NYSE:ESTC) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are seen as unimportant, outdated investment vehicles of years past. While there are over 8000 funds in operation at present, We hone in on the elite of this club, around 850 funds. It is estimated that this group of investors orchestrate the lion’s share of the smart money’s total asset base, and by tracking their finest picks, Insider Monkey has come up with various investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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 check out the new hedge fund action surrounding Shaw Communications Inc (NYSE:SJR).
Do Hedge Funds Think SJR Is A Good Stock To Buy Now?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SJR over the last 21 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the biggest position in Shaw Communications Inc (NYSE:SJR). Renaissance Technologies has a $71.6 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Steve Cohen of Point72 Asset Management, with a $18.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism contain John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position AlphaCrest Capital Management allocated the biggest weight to Shaw Communications Inc (NYSE:SJR), around 0.14% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, earmarking 0.09 percent of its 13F equity portfolio to SJR.
Judging by the fact that Shaw Communications Inc (NYSE:SJR) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of funds that slashed their full holdings last quarter. Interestingly, Stuart J. Zimmer’s Zimmer Partners cut the biggest position of all the hedgies watched by Insider Monkey, valued at about $4.5 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also dropped its stock, about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Shaw Communications Inc (NYSE:SJR) but similarly valued. These stocks are Huntington Bancshares Incorporated (NASDAQ:HBAN), Medical Properties Trust, Inc. (NYSE:MPW), Elastic N.V. (NYSE:ESTC), Galapagos NV (NASDAQ:GLPG), Vistra Energy Corp. (NYSE:VST), Quidel Corporation (NASDAQ:QDEL), and Bright Horizons Family Solutions Inc (NYSE:BFAM). All of these stocks’ market caps resemble SJR’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 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $608 million. That figure was $112 million in SJR’s case. Vistra Energy Corp. (NYSE:VST) is the most popular stock in this table. On the other hand Galapagos NV (NASDAQ:GLPG) is the least popular one with only 11 bullish hedge fund positions. Shaw Communications Inc (NYSE:SJR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SJR is 32.3. 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 SJR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SJR investors were disappointed as the stock returned 0.6% 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.
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Disclosure: None. This article was originally published at Insider Monkey.