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Were Hedge Funds Right About DISH Network Corp. (DISH)?

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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards DISH Network Corp. (NASDAQ:DISH).

DISH Network Corp. (NASDAQ:DISH) shareholders have witnessed a decrease in support from the world's most elite money managers in recent months. DISH Network Corp. (NASDAQ:DISH) was in 57 hedge funds' portfolios at the end of December. The all time high for this statistic is 60. Our calculations also showed that DISH 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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. 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). So you can still find a lot of gems by following hedge funds' moves today.

Dan Loeb THIRD POINT
Dan Loeb THIRD POINT

Dan Loeb of Third Point

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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. 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 homepage. Now let's take a glance at the latest hedge fund action regarding DISH Network Corp. (NASDAQ:DISH).

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

Heading into the first quarter of 2021, a total of 57 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the previous quarter. By comparison, 41 hedge funds held shares or bullish call options in DISH a year ago. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Is DISH A Good Stock To Buy?
Is DISH A Good Stock To Buy?

The largest stake in DISH Network Corp. (NASDAQ:DISH) was held by Eagle Capital Management, which reported holding $500.3 million worth of stock at the end of December. It was followed by Palestra Capital Management with a $313.5 million position. Other investors bullish on the company included Jericho Capital Asset Management, Paulson & Co, and Key Square Capital Management. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to DISH Network Corp. (NASDAQ:DISH), around 24.8% of its 13F portfolio. Pennant Capital Management is also relatively very bullish on the stock, earmarking 13.52 percent of its 13F equity portfolio to DISH.

Seeing as DISH Network Corp. (NASDAQ:DISH) has experienced a decline in interest from the smart money, it's safe to say that there exists a select few hedge funds that slashed their full holdings by the end of the fourth quarter. Intriguingly, Dan Loeb's Third Point dropped the biggest stake of the "upper crust" of funds followed by Insider Monkey, comprising close to $41.5 million in stock. Brian J. Higgins's fund, King Street Capital, also dumped its stock, about $36.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds by the end of the fourth quarter.

Let's also examine hedge fund activity in other stocks similar to DISH Network Corp. (NASDAQ:DISH). We will take a look at Insulet Corporation (NASDAQ:PODD), Western Digital Corporation (NASDAQ:WDC), IAC/InterActiveCorp (NASDAQ:IAC), Royal Caribbean Cruises Ltd. (NYSE:RCL), United Rentals, Inc. (NYSE:URI), Halliburton Company (NYSE:HAL), and Trimble Inc. (NASDAQ:TRMB). This group of stocks' market valuations match DISH's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PODD,41,1418120,3 WDC,44,1296703,5 IAC,67,2230707,-5 RCL,37,554165,7 URI,46,1060784,6 HAL,31,1027399,-1 TRMB,21,1330232,-14 Average,41,1274016,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $1274 million. That figure was $2021 million in DISH's case. IAC/InterActiveCorp (NASDAQ:IAC) is the most popular stock in this table. On the other hand Trimble Inc. (NASDAQ:TRMB) is the least popular one with only 21 bullish hedge fund positions. DISH Network Corp. (NASDAQ:DISH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DISH is 69.6. 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 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on DISH as the stock returned 38.5% since the end of Q4 (through 4/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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