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As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about fuboTV Inc. (NYSE:FUBO).
Is FUBO a good stock to buy? The best stock pickers were becoming less hopeful. The number of bullish hedge fund positions went down by 13 lately. fuboTV Inc. (NYSE:FUBO) was in 18 hedge funds' portfolios at the end of March. The all time high for this statistic is 31. Our calculations also showed that FUBO isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 31 hedge funds in our database with FUBO holdings at the end of December.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Stuart Zimmer of Zimmer Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Keeping this in mind we're going to take a look at the new hedge fund action encompassing fuboTV Inc. (NYSE:FUBO).
Do Hedge Funds Think FUBO Is A Good Stock To Buy Now?
At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -42% from the fourth quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in FUBO a year ago. With the smart money's capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Islet Management, managed by Joseph Samuels, holds the biggest position in fuboTV Inc. (NYSE:FUBO). Islet Management has a $89.2 million position in the stock, comprising 2.2% of its 13F portfolio. On Islet Management's heels is CaaS Capital, managed by Frank Fu, which holds a $22.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish encompass Nancy Zevenbergen's Zevenbergen Capital Investments, Michael Kharitonov and Jon David McAuliffe's Voleon Capital and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Voleon Capital allocated the biggest weight to fuboTV Inc. (NYSE:FUBO), around 11.75% of its 13F portfolio. Islet Management is also relatively very bullish on the stock, dishing out 2.2 percent of its 13F equity portfolio to FUBO.
Because fuboTV Inc. (NYSE:FUBO) has witnessed a decline in interest from hedge fund managers, it's safe to say that there is a sect of hedgies that slashed their full holdings in the first quarter. Intriguingly, Jacob Doft's Highline Capital Management dumped the largest stake of the 750 funds monitored by Insider Monkey, totaling about $64.5 million in stock, and D. E. Shaw's D E Shaw was right behind this move, as the fund cut about $57.8 million worth. These transactions are important to note, as total hedge fund interest fell by 13 funds in the first quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as fuboTV Inc. (NYSE:FUBO) but similarly valued. These stocks are Federated Hermes, Inc. (NYSE:FHI), Columbia Banking System Inc (NASDAQ:COLB), Patterson Companies, Inc. (NASDAQ:PDCO), Sprout Social, Inc. (NASDAQ:SPT), Lexington Realty Trust (NYSE:LXP), Steven Madden, Ltd. (NASDAQ:SHOO), and Pacira Biosciences Inc (NASDAQ:PCRX). This group of stocks' market caps match FUBO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FHI,27,190803,-6 COLB,14,157150,2 PDCO,20,142258,2 SPT,24,283496,-6 LXP,12,33985,0 SHOO,19,140715,5 PCRX,20,547351,0 Average,19.4,213680,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.4 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $208 million in FUBO's case. Federated Hermes, Inc. (NYSE:FHI) is the most popular stock in this table. On the other hand Lexington Realty Trust (NYSE:LXP) is the least popular one with only 12 bullish hedge fund positions. fuboTV Inc. (NYSE:FUBO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FUBO is 29.4. 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 28.5% in 2021 through July 23rd and beat the market by 10.1 percentage points. A small number of hedge funds were also right about betting on FUBO, though not to the same extent, as the stock returned 20.8% since the end of Q1 (through July 23rd) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.