Were Hedge Funds Right About Piling Into GCI Liberty, Inc. (GLIBA)?

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 first 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 4.5 years and analyze what the smart money thinks of GCI Liberty, Inc. (NASDAQ:GLIBA) based on that data and determine whether they were really smart about the stock.

Is GCI Liberty, Inc. (NASDAQ:GLIBA) an excellent investment now? Money managers were becoming hopeful. The number of long hedge fund bets inched up by 2 recently. Our calculations also showed that GLIBA isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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.

Donald Sussman Paloma Partners

Donald Sussman of Paloma Partners

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, this trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. 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 gold prices. So, we are checking out this junior gold mining stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the key hedge fund action encompassing GCI Liberty, Inc. (NASDAQ:GLIBA).

Hedge fund activity in GCI Liberty, Inc. (NASDAQ:GLIBA)

At Q1’s end, a total of 49 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GLIBA over the last 18 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Is GLIBA A Good Stock To Buy?

The largest stake in GCI Liberty, Inc. (NASDAQ:GLIBA) was held by FPR Partners, which reported holding $442.8 million worth of stock at the end of September. It was followed by Eagle Capital Management with a $337.3 million position. Other investors bullish on the company included Hudson Bay Capital Management, Tiger Eye Capital, and D E Shaw. In terms of the portfolio weights assigned to each position Tiger Eye Capital allocated the biggest weight to GCI Liberty, Inc. (NASDAQ:GLIBA), around 36.25% of its 13F portfolio. FPR Partners is also relatively very bullish on the stock, dishing out 18.2 percent of its 13F equity portfolio to GLIBA.

As industrywide interest jumped, specific money managers have been driving this bullishness. Jericho Capital Asset Management, managed by Josh Resnick, initiated the largest position in GCI Liberty, Inc. (NASDAQ:GLIBA). Jericho Capital Asset Management had $50.1 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $11.1 million position during the quarter. The other funds with brand new GLIBA positions are Steve Pigott’s Fort Baker Capital Management, Zach Petrone’s Highside Global Management, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s check out hedge fund activity in other stocks similar to GCI Liberty, Inc. (NASDAQ:GLIBA). We will take a look at BanColombia S.A. (NYSE:CIB), Formula One Group (NASDAQ:FWONA), Albemarle Corporation (NYSE:ALB), and Vail Resorts, Inc. (NYSE:MTN). All of these stocks’ market caps are closest to GLIBA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CIB 11 86861 -3
FWONA 17 257605 -5
ALB 24 73093 1
MTN 37 579984 4
Average 22.25 249386 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $249 million. That figure was $1834 million in GLIBA’s case. Vail Resorts, Inc. (NYSE:MTN) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks GCI Liberty, Inc. (NASDAQ:GLIBA) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but still managed to beat the market by 15.5 percentage points. Hedge funds were also right about betting on GLIBA, though not to the same extent, as the stock returned 24.8% in Q2 and outperformed the market as well.

Follow Grizzly Merger Sub 1 Llc (NASDAQ:GLIBA)

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