Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in October due to various reasons. Nevertheless, the data show elite investors' consensus picks have done well on average over the long-term. The top 30 S&P 500 stocks among hedge funds at the end of September 2018 returned an average of 6.7% through November 15th whereas the S&P 500 Index ETF gained only 2.6% during the same period. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at DISH Network Corp. (NASDAQ:DISH) from the perspective of those elite funds.
Is DISH Network Corp. (NASDAQ:DISH) a healthy stock for your portfolio? Hedge funds are becoming hopeful. The number of long hedge fund positions moved up by 3 lately. Our calculations showed that DISH isn't among the 30 most popular stocks among hedge funds however, though it was far more popular among billionaires, ranking within the top 20 among the 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index.
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' large-cap stock picks indeed failed to the beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
What does the smart money think about DISH Network Corp. (NASDAQ:DISH)?
Heading into the fourth quarter of 2018, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 8% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in DISH over the last 13 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Eagle Capital Management was the largest shareholder of DISH Network Corp. (NASDAQ:DISH), with a stake worth $547.5 million reported as of the end of September. Trailing Eagle Capital Management was King Street Capital, which amassed a stake valued at $486.6 million. Paulson & Co, Millennium Management, and GAMCO Investors were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, key money managers were breaking ground themselves. Element Capital Management, managed by Jeffrey Talpins, initiated the most valuable position in DISH Network Corp. (NASDAQ:DISH). Element Capital Management had $7.8 million invested in the company at the end of the quarter. Benjamin A. Smith's Laurion Capital Management also made a $4.6 million investment in the stock during the quarter. The following funds were also among the new DISH investors: Matthew Tewksbury's Stevens Capital Management, Paul Tudor Jones' Tudor Investment Corp, and Benjamin A. Smith's Laurion Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as DISH Network Corp. (NASDAQ:DISH) but similarly valued. We will take a look at Cardinal Health, Inc. (NYSE:CAH), Principal Financial Group Inc (NYSE:PFG), Fastenal Company (NASDAQ:FAST), and L3 Technologies, Inc. (NYSE:LLL). 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 CAH,27,1077693,-1 PFG,15,152523,-3 FAST,23,1429182,-1 LLL,26,867450,6 Average,22.75,882,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $882 million. That figure was $1.97 billion in DISH's case. Cardinal Health, Inc. (NYSE:CAH) is the most popular stock in this table. On the other hand Principal Financial Group Inc (NYSE:PFG) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks DISH Network Corp. (NASDAQ:DISH) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.