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Hedge Funds Have No Stomach For Sprint Corporation (S)

Nina Todic

Before we spend countless hours researching a company, we'd like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Sprint Corporation (NYSE:S).

Sprint Corporation (NYSE:S) investors should be aware of an increase in hedge fund interest lately though most hedge funds have no stomach for Sprint. Our calculations showed that S isn't among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to 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 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Crispin Odey

Let's take a gander at the latest hedge fund action regarding Sprint Corporation (NYSE:S).

How have hedgies been trading Sprint Corporation (NYSE:S)?

At Q4's end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in S over the last 14 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

S

The largest stake in Sprint Corporation (NYSE:S) was held by Renaissance Technologies, which reported holding $189.6 million worth of stock at the end of September. It was followed by Magnetar Capital with a $153 million position. Other investors bullish on the company included Alpine Associates, Odey Asset Management Group, and Point72 Asset Management.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls' herd. Point72 Asset Management, managed by Steve Cohen, assembled the biggest position in Sprint Corporation (NYSE:S). Point72 Asset Management had $44.4 million invested in the company at the end of the quarter. John Paulson's Paulson & Co also made a $16.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Carl Tiedemann and Michael Tiedemann's TIG Advisors, and George Zweig, Shane Haas and Ravi Chander's Signition LP.

Let's now review hedge fund activity in other stocks similar to Sprint Corporation (NYSE:S). We will take a look at Baker Hughes, a GE company (NYSE:BHGE), Republic Services, Inc. (NYSE:RSG), Paychex, Inc. (NASDAQ:PAYX), and Halliburton Company (NYSE:HAL). This group of stocks' market valuations are similar to S's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BHGE,28,515959,1 RSG,30,691501,4 PAYX,30,946675,0 HAL,34,558549,-5 Average,30.5,678171,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $678 million. That figure was $677 million in S's case. Halliburton Company (NYSE:HAL) is the most popular stock in this table. On the other hand Baker Hughes, a GE company (NYSE:BHGE) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks Sprint Corporation (NYSE:S) is even less popular than BHGE. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately Sprint wasn't in this group. New hedge funds that bet on Sprint were disappointed as the stock returned 9.8% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.

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

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