In this article we will analyze whether ViacomCBS Inc. (NASDAQ:VIAC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is VIAC stock a buy or sell? Hedge fund interest in ViacomCBS Inc. (NASDAQ:VIAC) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that VIAC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ameriprise Financial, Inc. (NYSE:AMP), Old Dominion Freight Line, Inc. (NASDAQ:ODFL), and Garmin Ltd. (NASDAQ:GRMN) to gather more data points.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Joshua Friedman of Canyon Capital Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). Keeping this in mind we’re going to take a gander at the fresh hedge fund action surrounding ViacomCBS Inc. (NASDAQ:VIAC).
Do Hedge Funds Think VIAC Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 44 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 64 hedge funds held shares or bullish call options in VIAC a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Among these funds, Baupost Group held the most valuable stake in ViacomCBS Inc. (NASDAQ:VIAC), which was worth $175.1 million at the end of the fourth quarter. On the second spot was Ariel Investments which amassed $137.5 million worth of shares. Canyon Capital Advisors, GAMCO Investors, and Contrarius Investment Management 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 Voleon Capital allocated the biggest weight to ViacomCBS Inc. (NASDAQ:VIAC), around 5.57% of its 13F portfolio. Contrarius Investment Management is also relatively very bullish on the stock, dishing out 4.32 percent of its 13F equity portfolio to VIAC.
Judging by the fact that ViacomCBS Inc. (NASDAQ:VIAC) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few hedge funds that decided to sell off their positions entirely by the end of the fourth quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management cut the largest position of all the hedgies watched by Insider Monkey, valued at close to $34.7 million in stock, and Randall Smith’s Alden Global Capital was right behind this move, as the fund dropped about $16.6 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to ViacomCBS Inc. (NASDAQ:VIAC). We will take a look at Ameriprise Financial, Inc. (NYSE:AMP), Old Dominion Freight Line, Inc. (NASDAQ:ODFL), Garmin Ltd. (NASDAQ:GRMN), Ryanair Holdings plc (NASDAQ:RYAAY), FleetCor Technologies, Inc. (NYSE:FLT), Coca-Cola European Partners plc (NYSE:CCEP), and Viatris Inc. (NASDAQ:VTRS). This group of stocks’ market values resemble VIAC’s market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMP,34,642947,5 ODFL,50,891260,3 GRMN,27,516357,-5 RYAAY,23,782186,7 FLT,44,2029777,4 CCEP,28,1003000,5 VTRS,67,2753638,19 Average,39,1231309,5.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $1231 million. That figure was $919 million in VIAC’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Ryanair Holdings plc (NASDAQ:RYAAY) is the least popular one with only 23 bullish hedge fund positions. ViacomCBS Inc. (NASDAQ:VIAC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VIAC is 49.5. 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 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 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on VIAC as the stock returned 162% since the end of Q4 (through 3/19) 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.