Is DISH Network Corp. (NASDAQ:DISH) a good bet right now? We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
DISH Network Corp. (NASDAQ:DISH) shareholders have witnessed an increase in hedge fund interest in recent months. Our calculations also showed that DISH isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a look at the latest hedge fund action regarding DISH Network Corp. (NASDAQ:DISH).
What does smart money think about DISH Network Corp. (NASDAQ:DISH)?
At the end of the second quarter, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from the previous quarter. On the other hand, there were a total of 38 hedge funds with a bullish position in DISH a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Brian J. Higgins's King Street Capital has the biggest position in DISH Network Corp. (NASDAQ:DISH), worth close to $505.3 million, accounting for 29.4% of its total 13F portfolio. Coming in second is Boykin Curry of Eagle Capital Management, with a $462.6 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions comprise John Paulson's Paulson & Co, Scott Bessent's Key Square Capital Management and Mario Gabelli's GAMCO Investors.
Consequently, specific money managers were breaking ground themselves. Masters Capital Management, managed by Mike Masters, initiated the largest call position in DISH Network Corp. (NASDAQ:DISH). Masters Capital Management had $19.2 million invested in the company at the end of the quarter. Matthew Mark's Jet Capital Investors also initiated a $17.3 million position during the quarter. The following funds were also among the new DISH investors: Israel Englander's Millennium Management, Robert Pohly's Samlyn Capital, and Robert Emil Zoellner's Alpine Associates.
Let's now review hedge fund activity in other stocks similar to DISH Network Corp. (NASDAQ:DISH). These stocks are Fastenal Company (NASDAQ:FAST), Incyte Corporation (NASDAQ:INCY), HEICO Corporation (NYSE:HEI), and Church & Dwight Co., Inc. (NYSE:CHD). All of these stocks' market caps resemble DISH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FAST,29,1154953,8 INCY,36,3728826,-3 HEI,35,1099994,9 CHD,30,338517,6 Average,32.5,1580573,5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.5 hedge funds with bullish positions and the average amount invested in these stocks was $1581 million. That figure was $1600 million in DISH's case. Incyte Corporation (NASDAQ:INCY) is the most popular stock in this table. On the other hand Fastenal Company (NASDAQ:FAST) is the least popular one with only 29 bullish hedge fund positions. DISH Network Corp. (NASDAQ:DISH) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately DISH wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); DISH investors were disappointed as the stock returned -11.3% during the third quarter 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 in 2019.
Disclosure: None. This article was originally published at Insider Monkey.