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Were Hedge Funds Right About Comcast (CMCSA)?

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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 887 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 December 31st. In this article we look at what those investors think of Comcast Corporation (NASDAQ:CMCSA).

Is Comcast Corporation (NASDAQ:CMCSA) the right pick for your portfolio? The smart money was taking an optimistic view. The number of bullish hedge fund bets increased by 2 lately. Comcast Corporation (NASDAQ:CMCSA) was in 84 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 105. Our calculations also showed that CMCSA isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

TRIAN PARTNERS
TRIAN PARTNERS

Nelson Peltz of Trian Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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. Now let's take a gander at the fresh hedge fund action encompassing Comcast Corporation (NASDAQ:CMCSA).

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

Heading into the first quarter of 2021, a total of 84 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from the third quarter of 2020. By comparison, 87 hedge funds held shares or bullish call options in CMCSA a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CMCSA A Good Stock To Buy?
Is CMCSA A Good Stock To Buy?

Among these funds, Eagle Capital Management held the most valuable stake in Comcast Corporation (NASDAQ:CMCSA), which was worth $2197.9 million at the end of the fourth quarter. On the second spot was Trian Partners which amassed $1040.6 million worth of shares. Orbis Investment Management, Egerton Capital Limited, and Soroban Capital Partners 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 3G Sahana Capital Management allocated the biggest weight to Comcast Corporation (NASDAQ:CMCSA), around 27.43% of its 13F portfolio. JNE Partners is also relatively very bullish on the stock, designating 23 percent of its 13F equity portfolio to CMCSA.

Consequently, some big names have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, assembled the most outsized position in Comcast Corporation (NASDAQ:CMCSA). Holocene Advisors had $146.8 million invested in the company at the end of the quarter. Patrick Degorce's Theleme Partners also initiated a $117.5 million position during the quarter. The other funds with brand new CMCSA positions are David Fiszel's Honeycomb Asset Management, Frank Fu's CaaS Capital, and Pasco Alfaro and Richard Turnure's Miura Global Management.

Let's now review hedge fund activity in other stocks similar to Comcast Corporation (NASDAQ:CMCSA). We will take a look at Netflix, Inc. (NASDAQ:NFLX), The Coca-Cola Company (NYSE:KO), NIKE, Inc. (NYSE:NKE), Pinduoduo Inc. (NASDAQ:PDD), Toyota Motor Corporation (NYSE:TM), Novartis AG (NYSE:NVS), and Merck & Co., Inc. (NYSE:MRK). This group of stocks' market values resemble CMCSA's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NFLX,116,15633343,12 KO,62,24683372,2 NKE,82,6285513,7 PDD,54,10528058,20 TM,11,797163,-1 NVS,23,1680463,-2 MRK,82,7171072,2 Average,61.4,9539855,5.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 61.4 hedge funds with bullish positions and the average amount invested in these stocks was $9540 million. That figure was $8832 million in CMCSA's case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 11 bullish hedge fund positions. Comcast Corporation (NASDAQ:CMCSA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CMCSA is 65.8. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately CMCSA wasn't nearly as popular as these 30 stocks and hedge funds that were betting on CMCSA were disappointed as the stock returned 4.3% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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

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