Should I Avoid Qurate Retail, Inc. (QRTEA)?

·5 min read

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Qurate Retail, Inc. (NASDAQ:QRTEA) in this article.

Qurate Retail, Inc. (NASDAQ:QRTEA) was in 34 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 43. QRTEA has seen a decrease in activity from the world's largest hedge funds lately. There were 39 hedge funds in our database with QRTEA positions at the end of the second quarter. Our calculations also showed that QRTEA isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we're going to take a look at the key hedge fund action regarding Qurate Retail, Inc. (NASDAQ:QRTEA).

Do Hedge Funds Think QRTEA Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from one quarter earlier. On the other hand, there were a total of 41 hedge funds with a bullish position in QRTEA a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is QRTEA A Good Stock To Buy?
Is QRTEA A Good Stock To Buy?

The largest stake in Qurate Retail, Inc. (NASDAQ:QRTEA) was held by FPR Partners, which reported holding $151.8 million worth of stock at the end of September. It was followed by Lyrical Asset Management with a $128.2 million position. Other investors bullish on the company included Contrarius Investment Management, Citadel Investment Group, and AQR Capital Management. In terms of the portfolio weights assigned to each position General Equity Partners allocated the biggest weight to Qurate Retail, Inc. (NASDAQ:QRTEA), around 10.51% of its 13F portfolio. Makaira Partners is also relatively very bullish on the stock, dishing out 6.42 percent of its 13F equity portfolio to QRTEA.

Judging by the fact that Qurate Retail, Inc. (NASDAQ:QRTEA) has faced falling interest from the entirety of the hedge funds we track, it's safe to say that there exists a select few hedge funds who sold off their positions entirely by the end of the third quarter. Intriguingly, Dmitry Balyasny's Balyasny Asset Management dropped the biggest investment of all the hedgies tracked by Insider Monkey, comprising close to $23.7 million in stock. Steven Tananbaum's fund, GoldenTree Asset Management, also cut its stock, about $9.9 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 5 funds by the end of the third quarter.

Let's check out hedge fund activity in other stocks similar to Qurate Retail, Inc. (NASDAQ:QRTEA). These stocks are The Hain Celestial Group, Inc. (NASDAQ:HAIN), The Ensign Group, Inc. (NASDAQ:ENSG), Lemonade, Inc. (NYSE:LMND), Warby Parker Inc. (NYSE:WRBY), ExlService Holdings, Inc. (NASDAQ:EXLS), Magnolia Oil & Gas Corporation (NASDAQ:MGY), and LivePerson, Inc. (NASDAQ:LPSN). This group of stocks' market values resemble QRTEA's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HAIN,24,982409,-2 ENSG,18,70587,1 LMND,16,117695,1 WRBY,12,1411133,12 EXLS,20,82507,5 MGY,28,143826,9 LPSN,26,225697,-1 Average,20.6,433408,3.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.6 hedge funds with bullish positions and the average amount invested in these stocks was $433 million. That figure was $677 million in QRTEA's case. Magnolia Oil & Gas Corporation (NASDAQ:MGY) is the most popular stock in this table. On the other hand Warby Parker Inc. (NYSE:WRBY) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Qurate Retail, Inc. (NASDAQ:QRTEA) is more popular among hedge funds. Our overall hedge fund sentiment score for QRTEA is 73.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately QRTEA wasn't nearly as popular as these 5 stocks and hedge funds that were betting on QRTEA were disappointed as the stock returned -10.2% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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

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