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Do Hedge Funds Love DISH Network Corp. (DISH)?

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  • DISH

In this article you are going to find out whether hedge funds think DISH Network Corp. (NASDAQ:DISH) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

DISH Network Corp. (NASDAQ:DISH) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 51 hedge funds' portfolios at the end of September. Our calculations also showed that DISH isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare DISH to other stocks including Verisign, Inc. (NASDAQ:VRSN), Huntington Bancshares Incorporated (NASDAQ:HBAN), and ORIX Corporation (NYSE:IX) to get a better sense of its popularity.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we're going to take a gander at the fresh hedge fund action encompassing DISH Network Corp. (NASDAQ:DISH).

Ryan Frick Dorsal Capital
Ryan Frick Dorsal Capital

Ryan Frick of Dorsal Capital

Do Hedge Funds Think DISH Is A Good Stock To Buy Now?

At Q3's end, a total of 51 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 60 hedge funds with a bullish position in DISH a year ago. With the smart money's sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

More specifically, Eagle Capital Management was the largest shareholder of DISH Network Corp. (NASDAQ:DISH), with a stake worth $799.7 million reported as of the end of September. Trailing Eagle Capital Management was Palestra Capital Management, which amassed a stake valued at $437.5 million. Jericho Capital Asset Management, Atreides Management, and D E Shaw 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 Pennant Capital Management allocated the biggest weight to DISH Network Corp. (NASDAQ:DISH), around 18.4% of its 13F portfolio. Key Square Capital Management is also relatively very bullish on the stock, setting aside 13.3 percent of its 13F equity portfolio to DISH.

Because DISH Network Corp. (NASDAQ:DISH) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there lies a certain "tier" of fund managers that slashed their entire stakes in the third quarter. Intriguingly, John Paulson's Paulson & Co cut the largest investment of all the hedgies tracked by Insider Monkey, worth an estimated $139.9 million in stock, and Zach Schreiber's Point State Capital was right behind this move, as the fund cut about $24.7 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as DISH Network Corp. (NASDAQ:DISH) but similarly valued. These stocks are Verisign, Inc. (NASDAQ:VRSN), Huntington Bancshares Incorporated (NASDAQ:HBAN), ORIX Corporation (NYSE:IX), Invitation Homes Inc. (NYSE:INVH), Catalent Inc (NYSE:CTLT), Ginkgo Bioworks Holdings Inc. (NYSE:DNA), and Royal Caribbean Cruises Ltd. (NYSE:RCL). All of these stocks' market caps are closest to DISH's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VRSN,40,5398949,-1 HBAN,27,298895,-6 IX,4,5007,0 INVH,36,824544,3 CTLT,38,1113573,-2 DNA,32,5696252,32 RCL,35,575404,-7 Average,30.3,1987518,2.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $1988 million. That figure was $2440 million in DISH's case. Verisign, Inc. (NASDAQ:VRSN) 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. Compared to these stocks DISH Network Corp. (NASDAQ:DISH) is more popular among hedge funds. Our overall hedge fund sentiment score for DISH is 80.5. 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. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately DISH wasn't nearly as popular as these 5 stocks and hedge funds that were betting on DISH were disappointed as the stock returned -28.1% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.