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Was The Smart Money Right About Liberty Media Corporation (BATRA)?

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·5 min read
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We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).

In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Keeping this in mind, let's take a look at whether Liberty Media Corporation (NASDAQ:BATRA) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Liberty Media Corporation (NASDAQ:BATRA) investors should pay attention to an increase in enthusiasm from smart money of late. BATRA was in 10 hedge funds' portfolios at the end of the fourth quarter of 2019. There were 9 hedge funds in our database with BATRA positions at the end of the previous quarter. Our calculations also showed that BATRA isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).

Mario Gabelli
Mario Gabelli

We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader's corona catalyst trades. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to go over the key hedge fund action encompassing Liberty Media Corporation (NASDAQ:BATRA).

Hedge fund activity in Liberty Media Corporation (NASDAQ:BATRA)

At Q4's end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the third quarter of 2019. By comparison, 10 hedge funds held shares or bullish call options in BATRA a year ago. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Is BATRA A Good Stock To Buy?
Is BATRA A Good Stock To Buy?

The largest stake in Liberty Media Corporation (NASDAQ:BATRA) was held by GAMCO Investors, which reported holding $44.8 million worth of stock at the end of September. It was followed by Park West Asset Management with a $20.1 million position. Other investors bullish on the company included Renaissance Technologies, Horizon Asset Management, and Deep Field Asset Management. In terms of the portfolio weights assigned to each position Park West Asset Management allocated the biggest weight to Liberty Media Corporation (NASDAQ:BATRA), around 0.85% of its 13F portfolio. Potrero Capital Research is also relatively very bullish on the stock, setting aside 0.44 percent of its 13F equity portfolio to BATRA.

Consequently, some big names were leading the bulls' herd. Ancora Advisors, managed by Frederick DiSanto, established the biggest position in Liberty Media Corporation (NASDAQ:BATRA). Ancora Advisors had $0 million invested in the company at the end of the quarter.

Let's go over hedge fund activity in other stocks similar to Liberty Media Corporation (NASDAQ:BATRA). We will take a look at Liberty Media Corporation (NASDAQ:BATRK), First Busey Corporation (NASDAQ:BUSE), Regenxbio Inc (NASDAQ:RGNX), and Addus Homecare Corporation (NASDAQ:ADUS). This group of stocks' market caps are closest to BATRA's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BATRK,25,338852,2 BUSE,12,48307,1 RGNX,19,234834,7 ADUS,17,121050,-7 Average,18.25,185761,0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $186 million. That figure was $77 million in BATRA's case. Liberty Media Corporation (NASDAQ:BATRK) is the most popular stock in this table. On the other hand First Busey Corporation (NASDAQ:BUSE) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Liberty Media Corporation (NASDAQ:BATRA) is even less popular than BUSE. Hedge funds dodged a bullet by taking a bearish stance towards BATRA. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st but managed to beat the market by 12.9 percentage points. Unfortunately BATRA wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); BATRA investors were disappointed as the stock returned -32.9% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

5 Most Popular Stocks Among Hedge Funds
5 Most Popular Stocks Among Hedge Funds

Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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

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