The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Grupo Televisa SAB (NYSE:TV) and determine whether the smart money was really smart about this stock.
Grupo Televisa SAB (NYSE:TV) has seen an increase in activity from the world's largest hedge funds of late. Grupo Televisa SAB (NYSE:TV) was in 21 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 29. Our calculations also showed that TV isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 S&P 500 ETFs by more than 56 percentage points since March 2017 (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. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. With all of this in mind let's take a peek at the fresh hedge fund action encompassing Grupo Televisa SAB (NYSE:TV).
What have hedge funds been doing with Grupo Televisa SAB (NYSE:TV)?
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TV over the last 20 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, FPR Partners, managed by Bob Peck and Andy Raab, holds the most valuable position in Grupo Televisa SAB (NYSE:TV). FPR Partners has a $157 million position in the stock, comprising 5.5% of its 13F portfolio. The second largest stake is held by Michael Larson of Bill & Melinda Gates Foundation Trust, with a $88.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions contain Renaissance Technologies, Richard Merage's MIG Capital and Barry Dargan's Intermede Investment Partners. In terms of the portfolio weights assigned to each position FPR Partners allocated the biggest weight to Grupo Televisa SAB (NYSE:TV), around 5.46% of its 13F portfolio. Steel Canyon Capital is also relatively very bullish on the stock, designating 3.7 percent of its 13F equity portfolio to TV.
Consequently, specific money managers have jumped into Grupo Televisa SAB (NYSE:TV) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the biggest position in Grupo Televisa SAB (NYSE:TV). Arrowstreet Capital had $4.7 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.9 million investment in the stock during the quarter. The other funds with brand new TV positions are Matthew Hulsizer's PEAK6 Capital Management and Minhua Zhang's Weld Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Grupo Televisa SAB (NYSE:TV). These stocks are Radian Group Inc (NYSE:RDN), JetBlue Airways Corporation (NASDAQ:JBLU), Safehold Inc. (NYSE:SAFE), Eagle Materials, Inc. (NYSE:EXP), Verint Systems Inc. (NASDAQ:VRNT), Lexington Realty Trust (NYSE:LXP), and Karuna Therapeutics, Inc. (NASDAQ:KRTX). This group of stocks' market valuations are similar to TV's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RDN,33,190994,5 JBLU,28,131834,-8 SAFE,7,7836,2 EXP,41,428808,7 VRNT,25,333301,8 LXP,10,43913,0 KRTX,16,177325,0 Average,22.9,187716,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $188 million. That figure was $426 million in TV's case. Eagle Materials, Inc. (NYSE:EXP) is the most popular stock in this table. On the other hand Safehold Inc. (NYSE:SAFE) is the least popular one with only 7 bullish hedge fund positions. Grupo Televisa SAB (NYSE:TV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TV is 49.3. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. A small number of hedge funds were also right about betting on TV as the stock returned 17.9% in the third quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.