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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Crown Castle International Corp. (NYSE:CCI) based on those filings.
Is Crown Castle International Corp. (NYSE:CCI) going to take off soon? Hedge funds were turning bullish. The number of bullish hedge fund bets rose by 3 in recent months. Crown Castle International Corp. (NYSE:CCI) was in 43 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 47. Our calculations also showed that CCI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 40 hedge funds in our database with CCI holdings at the end of December.
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' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Stuart Zimmer of Zimmer Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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. Keeping this in mind we're going to take a gander at the key hedge fund action encompassing Crown Castle International Corp. (NYSE:CCI).
Do Hedge Funds Think CCI Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CCI over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Bill & Melinda Gates Foundation Trust held the most valuable stake in Crown Castle International Corp. (NYSE:CCI), which was worth $875.6 million at the end of the fourth quarter. On the second spot was Fisher Asset Management which amassed $385.1 million worth of shares. Echo Street Capital Management, D E Shaw, and Zimmer 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 Skylands Capital allocated the biggest weight to Crown Castle International Corp. (NYSE:CCI), around 6.9% of its 13F portfolio. Courage Capital is also relatively very bullish on the stock, earmarking 6.81 percent of its 13F equity portfolio to CCI.
Consequently, key money managers were breaking ground themselves. MSDC Management, managed by Marc Lisker, Glenn Fuhrman and John Phelan, assembled the biggest position in Crown Castle International Corp. (NYSE:CCI). MSDC Management had $41.9 million invested in the company at the end of the quarter. Mark Coe's Intrinsic Edge Capital also made a $21.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Donald Sussman's Paloma Partners, Andrew Weiss's Weiss Asset Management, and Steve Cohen's Point72 Asset Management.
Let's now review hedge fund activity in other stocks similar to Crown Castle International Corp. (NYSE:CCI). We will take a look at PNC Financial Services Group Inc. (NYSE:PNC), Duke Energy Corporation (NYSE:DUK), Enbridge Inc (NYSE:ENB), Mercadolibre Inc (NASDAQ:MELI), CME Group Inc (NASDAQ:CME), CSX Corporation (NYSE:CSX), and Baidu, Inc. (NASDAQ:BIDU). This group of stocks' market caps match CCI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PNC,39,418919,4 DUK,34,602208,-4 ENB,22,144689,-6 MELI,69,5223036,-10 CME,60,2399257,2 CSX,53,3699622,-5 BIDU,89,6572291,38 Average,52.3,2722860,2.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 52.3 hedge funds with bullish positions and the average amount invested in these stocks was $2723 million. That figure was $1996 million in CCI's case. Baidu, Inc. (NASDAQ:BIDU) is the most popular stock in this table. On the other hand Enbridge Inc (NYSE:ENB) is the least popular one with only 22 bullish hedge fund positions. Crown Castle International Corp. (NYSE:CCI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CCI is 51.1. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on CCI as the stock returned 13.6% since the end of the first quarter (through 6/18) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.