We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Melvin Capital's recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Comcast Corporation (NASDAQ:CMCSA).
Comcast Corporation (NASDAQ:CMCSA) investors should be aware of a decrease in enthusiasm from smart money lately. Comcast Corporation (NASDAQ:CMCSA) was in 75 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 105. There were 84 hedge funds in our database with CMCSA positions at the end of the second quarter. Our calculations also showed that CMCSA 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 let's go over the key hedge fund action surrounding Comcast Corporation (NASDAQ:CMCSA).
Nelson Peltz of Trian Partners
Do Hedge Funds Think CMCSA Is A Good Stock To Buy Now?
At Q3's end, a total of 75 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the second quarter of 2021. By comparison, 82 hedge funds held shares or bullish call options in CMCSA 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.
Among these funds, Eagle Capital Management held the most valuable stake in Comcast Corporation (NASDAQ:CMCSA), which was worth $1614.4 million at the end of the third quarter. On the second spot was Trian Partners which amassed $1118.1 million worth of shares. Egerton Capital Limited, Orbis Investment Management, and Arrowstreet 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 JNE Partners allocated the biggest weight to Comcast Corporation (NASDAQ:CMCSA), around 17.72% of its 13F portfolio. 3G Sahana Capital Management is also relatively very bullish on the stock, earmarking 16.84 percent of its 13F equity portfolio to CMCSA.
Due to the fact that Comcast Corporation (NASDAQ:CMCSA) has faced a decline in interest from the smart money, logic holds that there is a sect of fund managers that slashed their entire stakes last quarter. Intriguingly, Matthew Stadelman's Diamond Hill Capital said goodbye to the largest investment of all the hedgies monitored by Insider Monkey, valued at close to $366 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund sold off about $68 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 9 funds last quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Comcast Corporation (NASDAQ:CMCSA) but similarly valued. These stocks are Royal Dutch Shell plc (NYSE:RDS), Exxon Mobil Corporation (NYSE:XOM), Toyota Motor Corporation (NYSE:TM), Pfizer Inc. (NYSE:PFE), Oracle Corporation (NYSE:ORCL), NIKE, Inc. (NYSE:NKE), and Cisco Systems, Inc. (NASDAQ:CSCO). This group of stocks' market values are similar to CMCSA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RDS,33,2053904,-5 XOM,64,4640444,-4 TM,10,876130,-2 PFE,74,2662716,7 ORCL,56,3473487,1 NKE,70,5682126,3 CSCO,63,3937668,3 Average,52.9,3332354,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 52.9 hedge funds with bullish positions and the average amount invested in these stocks was $3332 million. That figure was $8547 million in CMCSA's case. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Comcast Corporation (NASDAQ:CMCSA) is more popular among hedge funds. Our overall hedge fund sentiment score for CMCSA is 67.4. 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 CMCSA wasn't nearly as popular as these 5 stocks and hedge funds that were betting on CMCSA 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.