Legendary investors such as Jeffrey Talpins and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don't publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That's why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Grupo Televisa SAB (NYSE:TV) from the perspective of those elite funds.
Is Grupo Televisa SAB (NYSE:TV) worth your attention right now? Investors who are in the know are becoming less confident. The number of long hedge fund bets retreated by 5 lately. Our calculations also showed that TV isn't among the 30 most popular stocks among hedge funds. TV was in 14 hedge funds' portfolios at the end of December. Overall hedge fund sentiment towards the stock is at its all time low.
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 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.
We're going to check out the new hedge fund action encompassing Grupo Televisa SAB (NYSE:TV).
Hedge fund activity in Grupo Televisa SAB (NYSE:TV)
Heading into the first quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -26% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in TV a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Grupo Televisa SAB (NYSE:TV) was held by FPR Partners, which reported holding $220.8 million worth of stock at the end of September. It was followed by Bill & Melinda Gates Foundation Trust with a $212.3 million position. Other investors bullish on the company included Fisher Asset Management, Dorsal Capital Management, and Renaissance Technologies.
Due to the fact that Grupo Televisa SAB (NYSE:TV) has faced bearish sentiment from the smart money, we can see that there lies a certain "tier" of fund managers who sold off their positions entirely last quarter. Interestingly, Stuart J. Zimmer's Zimmer Partners sold off the biggest investment of all the hedgies tracked by Insider Monkey, comprising close to $59.9 million in stock. Francis Cueto's fund, Asturias Capital, also said goodbye to its stock, about $17.8 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 5 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Grupo Televisa SAB (NYSE:TV). These stocks are PulteGroup, Inc. (NYSE:PHM), Sarepta Therapeutics Inc (NASDAQ:SRPT), Service Corporation International (NYSE:SCI), and Cemex SAB de CV (NYSE:CX). This group of stocks' market caps match TV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PHM,24,567082,6 SRPT,41,940036,-2 SCI,17,523621,2 CX,10,100016,-3 Average,23,532689,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $533 million. That figure was $787 million in TV's case. Sarepta Therapeutics Inc (NASDAQ:SRPT) is the most popular stock in this table. On the other hand Cemex SAB de CV (NYSE:CX) is the least popular one with only 10 bullish hedge fund positions. Grupo Televisa SAB (NYSE:TV) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 21.3% through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Unfortunately ST wasn't in this group. Hedge funds that bet on ST were disappointed as the stock lost 12.6% 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 12 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.