Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of ViacomCBS Inc. (NASDAQ:VIAC) based on that data.
Is VIAC a good stock to buy now? ViacomCBS Inc. (NASDAQ:VIAC) investors should be aware of a decrease in enthusiasm from smart money lately. ViacomCBS Inc. (NASDAQ:VIAC) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 64. Our calculations also showed that VIAC 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a 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. With all of this in mind let’s view the recent hedge fund action surrounding ViacomCBS Inc. (NASDAQ:VIAC).
Do Hedge Funds Think VIAC Is A Good Stock To Buy Now?
At Q3’s end, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from one quarter earlier. On the other hand, there were a total of 42 hedge funds with a bullish position in VIAC a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Baupost Group held the most valuable stake in ViacomCBS Inc. (NASDAQ:VIAC), which was worth $527.6 million at the end of the third quarter. On the second spot was Ariel Investments which amassed $114.1 million worth of shares. Glenview Capital, Canyon Capital Advisors, and GAMCO Investors 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 Alden Global Capital allocated the biggest weight to ViacomCBS Inc. (NASDAQ:VIAC), around 6.04% of its 13F portfolio. Baupost Group is also relatively very bullish on the stock, dishing out 5.7 percent of its 13F equity portfolio to VIAC.
Judging by the fact that ViacomCBS Inc. (NASDAQ:VIAC) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of fund managers that elected to cut their positions entirely by the end of the third quarter. Intriguingly, Michael Rockefeller and KarláKroeker’s Woodline Partners dropped the largest stake of the 750 funds monitored by Insider Monkey, comprising close to $6.1 million in stock. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $4.5 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as ViacomCBS Inc. (NASDAQ:VIAC) but similarly valued. We will take a look at Hologic, Inc. (NASDAQ:HOLX), Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), Smith & Nephew plc (NYSE:SNN), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Kansas City Southern (NYSE:KSU), CDW Corporation (NASDAQ:CDW), and Citrix Systems, Inc. (NASDAQ:CTXS). This group of stocks’ market valuations are closest to VIAC’s market valuation.
|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 34.7 hedge funds with bullish positions and the average amount invested in these stocks was $1204 million. That figure was $1249 million in VIAC’s case. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is the most popular stock in this table. On the other hand Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is the least popular one with only 8 bullish hedge fund positions. ViacomCBS Inc. (NASDAQ:VIAC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VIAC is 58.6. 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 gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on VIAC as the stock returned 30.8% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.