We are still in an overall bull market and many stocks that smart money investors were piling into surged in 2019. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 57% each. Hedge funds' top 3 stock picks returned 44.6% this year and beat the S&P 500 ETFs by nearly 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Crown Castle International Corp. (NYSE:CCI).
Crown Castle International Corp. (NYSE:CCI) was in 34 hedge funds' portfolios at the end of the third quarter of 2019. CCI shareholders have witnessed an increase in activity from the world's largest hedge funds in recent months. There were 33 hedge funds in our database with CCI positions at the end of the previous quarter. Our calculations also showed that CCI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings).
If you'd ask most stock holders, hedge funds are assumed to be worthless, old investment vehicles of yesteryear. While there are over 8000 funds with their doors open at present, We hone in on the moguls of this club, about 750 funds. Most estimates calculate that this group of people watch over the lion's share of all hedge funds' total asset base, and by paying attention to their first-class picks, Insider Monkey has come up with many investment strategies that have historically outstripped the broader indices. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. With all of this in mind we're going to check out the key hedge fund action regarding Crown Castle International Corp. (NYSE:CCI).
How are hedge funds trading Crown Castle International Corp. (NYSE:CCI)?
Heading into the fourth quarter of 2019, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. On the other hand, there were a total of 32 hedge funds with a bullish position in CCI a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Crown Castle International Corp. (NYSE:CCI) was held by Bill & Melinda Gates Foundation Trust, which reported holding $741.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $372 million position. Other investors bullish on the company included Echo Street Capital Management, AQR Capital Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position Skylands Capital allocated the biggest weight to Crown Castle International Corp. (NYSE:CCI), around 8% of its 13F portfolio. Bill & Melinda Gates Foundation Trust is also relatively very bullish on the stock, setting aside 3.49 percent of its 13F equity portfolio to CCI.
Now, specific money managers were breaking ground themselves. D E Shaw, managed by David E. Shaw, created the biggest position in Crown Castle International Corp. (NYSE:CCI). D E Shaw had $22.8 million invested in the company at the end of the quarter. Matthew Tewksbury's Stevens Capital Management also made a $6 million investment in the stock during the quarter. The following funds were also among the new CCI investors: Mark Coe's Intrinsic Edge Capital, Parvinder Thiara's Athanor Capital, and Matthew Hulsizer's PEAK6 Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Crown Castle International Corp. (NYSE:CCI). These stocks are CIGNA Corporation (NYSE:CI), Ecolab Inc. (NYSE:ECL), Boston Scientific Corporation (NYSE:BSX), and Eni SpA (NYSE:E). This group of stocks' market valuations resemble CCI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CI,62,3080624,14 ECL,38,2169031,11 BSX,48,2372367,-2 E,5,58328,0 Average,38.25,1920088,5.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.25 hedge funds with bullish positions and the average amount invested in these stocks was $1920 million. That figure was $1850 million in CCI's case. CIGNA Corporation (NYSE:CI) is the most popular stock in this table. On the other hand Eni SpA (NYSE:E) is the least popular one with only 5 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 calculations showed that top 20 most popular stocks among hedge funds returned 41.1% in 2019 through December 23rd and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. A small number of hedge funds were also right about betting on CCI, though not to the same extent, as the stock returned 34% in 2019 (as of 12/23) and outperformed the market. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.