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Should You Hold Your Conviction on Liberty Broadband Corporation (LBRDA)?

Soumya Eswaran
·3-min read

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. Risk assets continued to rise while market volatility remained low in the first quarter, perhaps indicating that investors are becoming somewhat complacent.  In the quarter, the fund appreciated 5.46% (net), trailing its benchmark, the S&P 500 Index, which returned 10.56%. Also, the Fund slightly lagged behind its secondary benchmark, the CBOE S&P 500 Buy/Write Index’s 6.02% return. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Meridian Hedged Equity Fund highlighted stocks like Liberty Broadband Corporation (NASDAQ:LBRDA), in the first quarter 2024 investor letter. Liberty Broadband Corporation (NASDAQ:LBRDA) is a holding company that engages in communications businesses. The one-month return of Liberty Broadband Corporation (NASDAQ:LBRDA) was 0.38%, and its shares lost 33.24% of their value over the last 52 weeks. On June 26, 2024, Liberty Broadband Corporation (NASDAQ:LBRDA) stock closed at $52.90 per share with a market capitalization of $7.568 billion.

Meridian Hedged Equity Fund stated the following regarding Liberty Broadband Corporation (NASDAQ:LBRDA) in its first quarter 2024 investor letter:

"Liberty Broadband Corporation (NASDAQ:LBRDA) is a holding company. The largest asset at Liberty Broadband is a 26% ownership stake in Charter Communications, which is a cable company. This ownership exposes Liberty Broadband to trends in the cable industry and the equity value of Charter shares. The underperformance of Liberty Broadband shares over the past quarter was largely driven by the underperformance of Charter. Charter shares have been under pressure since its recent earnings report when management raised the near-term capital expenditures (capex) outlook for network upgrades and line extensions. Higher capex, the looming defunding of the Affordable Connectivity Program (ACP), continued competitive pressure on broadband net adds, and some incremental free cash flow pressure from higher cash taxes have also represented recent/current headwinds for the stock. Despite these near-term challenges, we remain optimistic about the long-term prospects for both Charter and the cable industry. Cable companies are well-positioned to benefit from the growing demand for high-speed internet access, as more and more people work from home and consume streaming video content. Additionally, cable companies have been investing heavily in network upgrades and new technologies, such as DOCSIS 4.0, that will allow them to offer even faster speeds and more reliable service. We also see an opportunity for cable companies to bundle their broadband services with other products, such as mobile phone service and home security, which could help to drive further growth. Given this favorable outlook, we continue to hold shares of the company."

A technician in a telecom facility installing wireless routers and operating on a computer.

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Liberty Broadband Corporation (NASDAQ:LBRDA) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Liberty Broadband Corporation (NASDAQ:LBRDA) at the end of the first quarter which was 19 in the previous quarter. While we acknowledge the potential of Liberty Broadband Corporation (NASDAQ:LBRDA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Liberty Broadband Corporation (NASDAQ:LBRDA) in another article and shared the list of best stocks to buy in 2024 according on billionaire George Soros. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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