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 Fox Corporation (NASDAQ:FOXA) based on that data.
Is FOXA a good stock to buy? Investors who are in the know were taking a pessimistic view. The number of bullish hedge fund positions went down by 3 recently. Fox Corporation (NASDAQ:FOXA) was in 32 hedge funds' portfolios at the end of September. The all time high for this statistic is 78. Our calculations also showed that FOXA 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). There were 35 hedge funds in our database with FOXA positions at the end of the second quarter.
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.
Seth Klarman of Baupost Group
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 we're going to take a look at the key hedge fund action encompassing Fox Corporation (NASDAQ:FOXA).
Do Hedge Funds Think FOXA Is A Good Stock To Buy Now?
At Q3's end, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FOXA over the last 21 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.
Among these funds, Baupost Group held the most valuable stake in Fox Corporation (NASDAQ:FOXA), which was worth $750.7 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $221.8 million worth of shares. Yacktman Asset Management, 3G Sahana Capital Management, and Contrarius Investment Management 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 3G Sahana Capital Management allocated the biggest weight to Fox Corporation (NASDAQ:FOXA), around 13.02% of its 13F portfolio. Baupost Group is also relatively very bullish on the stock, earmarking 8.11 percent of its 13F equity portfolio to FOXA.
Seeing as Fox Corporation (NASDAQ:FOXA) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds that decided to sell off their positions entirely in the third quarter. It's worth mentioning that Brett Barakett's Tremblant Capital dumped the biggest position of the 750 funds watched by Insider Monkey, comprising about $98 million in stock, and Phill Gross and Robert Atchinson's Adage Capital Management was right behind this move, as the fund sold off about $33.4 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 3 funds in the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Fox Corporation (NASDAQ:FOXA) but similarly valued. These stocks are iQIYI, Inc. (NASDAQ:IQ), BioNTech SE (NASDAQ:BNTX), ORIX Corporation (NYSE:IX), MPLX LP (NYSE:MPLX), StoneCo Ltd. (NASDAQ:STNE), Trip.com Group Limited (NASDAQ:TCOM), and Northern Trust Corporation (NASDAQ:NTRS). This group of stocks' market valuations are similar to FOXA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IQ,18,1132945,1 BNTX,17,218302,2 IX,4,4093,0 MPLX,14,91155,1 STNE,38,2294511,3 TCOM,30,1525963,1 NTRS,28,272255,-7 Average,21.3,791318,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $791 million. That figure was $1506 million in FOXA's case. StoneCo Ltd. (NASDAQ:STNE) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 4 bullish hedge fund positions. Fox Corporation (NASDAQ:FOXA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FOXA is 55.5. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 33.3% in 2020 through December 18th and beat the market again by 16.4 percentage points. Unfortunately FOXA wasn't nearly as popular as these 20 stocks and hedge funds that were betting on FOXA were disappointed as the stock returned 1.2% since the end of September (through 12/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.