Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don't make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Qurate Retail, Inc. (NASDAQ:QRTEA) to find out whether there were any major changes in hedge funds' views.
Is QRTEA stock a buy? Qurate Retail, Inc. (NASDAQ:QRTEA) has seen a decrease in hedge fund sentiment in recent months. Qurate Retail, Inc. (NASDAQ:QRTEA) was in 36 hedge funds' portfolios at the end of December. The all time high for this statistic is 43. There were 41 hedge funds in our database with QRTEA positions at the end of the third quarter. Our calculations also showed that QRTEA isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the 21st century investor’s toolkit there are dozens of signals stock traders use to grade publicly traded companies. Two of the best signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the market by a healthy amount (see the details here).
Bruce Kovner of Caxton Associates LP
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Keeping this in mind let's take a peek at the new hedge fund action surrounding Qurate Retail, Inc. (NASDAQ:QRTEA).
Do Hedge Funds Think QRTEA Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards QRTEA over the last 22 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Qurate Retail, Inc. (NASDAQ:QRTEA) was held by FPR Partners, which reported holding $173 million worth of stock at the end of December. It was followed by Lyrical Asset Management with a $148 million position. Other investors bullish on the company included Contrarius Investment Management, Arrowstreet Capital, and Makaira Partners. In terms of the portfolio weights assigned to each position Makaira Partners allocated the biggest weight to Qurate Retail, Inc. (NASDAQ:QRTEA), around 12.7% of its 13F portfolio. General Equity Partners is also relatively very bullish on the stock, setting aside 9.93 percent of its 13F equity portfolio to QRTEA.
Judging by the fact that Qurate Retail, Inc. (NASDAQ:QRTEA) has experienced bearish sentiment from the smart money, logic holds that there exists a select few hedge funds who were dropping their positions entirely last quarter. At the top of the heap, Paul Marshall and Ian Wace's Marshall Wace LLP cut the largest position of all the hedgies followed by Insider Monkey, comprising close to $2.9 million in stock, and Benjamin A. Smith's Laurion Capital Management was right behind this move, as the fund cut about $1.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 5 funds last quarter.
Let's check out hedge fund activity in other stocks similar to Qurate Retail, Inc. (NASDAQ:QRTEA). These stocks are WPX Energy Inc (NYSE:WPX), JetBlue Airways Corporation (NASDAQ:JBLU), Kinsale Capital Group, Inc. (NASDAQ:KNSL), Colfax Corporation (NYSE:CFX), Immunovant, Inc. (NASDAQ:IMVT), Quaker Chemical Corp (NYSE:KWR), and Crane Co. (NYSE:CR). 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 WPX,35,341766,6 JBLU,29,344811,6 KNSL,17,95292,1 CFX,36,824290,-9 IMVT,36,578066,7 KWR,13,187153,-3 CR,24,265292,-5 Average,27.1,376667,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $377 million. That figure was $832 million in QRTEA's case. Colfax Corporation (NYSE:CFX) is the most popular stock in this table. On the other hand Quaker Chemical Corp (NYSE:KWR) is the least popular one with only 13 bullish hedge fund positions. Qurate Retail, Inc. (NASDAQ:QRTEA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for QRTEA is 75.1. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on QRTEA, though not to the same extent, as the stock returned 7.7% since Q4 (through April 1st) and outperformed the market as well.
Get real-time email alerts: Follow Qurate Retail Inc. (NASDAQ:QRTEA)
Disclosure: None. This article was originally published at Insider Monkey.