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Hedge Funds Are Cashing Out Of Charter Communications, Inc. (CHTR)

·6 min read

The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Charter Communications, Inc. (NASDAQ:CHTR).

Charter Communications, Inc. (NASDAQ:CHTR) investors should pay attention to a decrease in hedge fund sentiment recently. Charter Communications, Inc. (NASDAQ:CHTR) was in 74 hedge funds' portfolios at the end of March. The all time high for this statistic is 134. There were 90 hedge funds in our database with CHTR positions at the end of the fourth quarter. Our calculations also showed that CHTR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you'd ask most market participants, hedge funds are perceived as unimportant, old financial vehicles of years past. While there are greater than 8000 funds with their doors open today, Our researchers hone in on the elite of this group, around 850 funds. These investment experts preside over the lion's share of all hedge funds' total capital, and by following their matchless picks, Insider Monkey has figured out various investment strategies that have historically outrun Mr. Market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Chris Hohn's top 10 stock picks
Chris Hohn's top 10 stock picks

Chris Hohn

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla 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. With all of this in mind let's take a look at the key hedge fund action regarding Charter Communications, Inc. (NASDAQ:CHTR).

Do Hedge Funds Think CHTR Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 74 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from the fourth quarter of 2020. By comparison, 104 hedge funds held shares or bullish call options in CHTR a year ago. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

Is CHTR A Good Stock To Buy?
Is CHTR A Good Stock To Buy?

The largest stake in Charter Communications, Inc. (NASDAQ:CHTR) was held by TCI Fund Management, which reported holding $6326.2 million worth of stock at the end of December. It was followed by Berkshire Hathaway with a $3216.8 million position. Other investors bullish on the company included Egerton Capital Limited, AltaRock Partners, and BlueSpruce Investments. In terms of the portfolio weights assigned to each position Triple Frond Partners allocated the biggest weight to Charter Communications, Inc. (NASDAQ:CHTR), around 24.3% of its 13F portfolio. AltaRock Partners is also relatively very bullish on the stock, dishing out 24.21 percent of its 13F equity portfolio to CHTR.

Because Charter Communications, Inc. (NASDAQ:CHTR) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds who were dropping their positions entirely last quarter. Interestingly, Aaron Cowen's Suvretta Capital Management dumped the biggest investment of the "upper crust" of funds monitored by Insider Monkey, valued at close to $190.2 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund sold off about $42.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 16 funds last quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Charter Communications, Inc. (NASDAQ:CHTR) but similarly valued. We will take a look at JD.Com Inc (NASDAQ:JD), Royal Bank of Canada (NYSE:RY), Sony Corporation (NYSE:SNE), AstraZeneca plc (NYSE:AZN), Starbucks Corporation (NASDAQ:SBUX), Caterpillar Inc. (NYSE:CAT), and Anheuser-Busch InBev SA/NV (NYSE:BUD). This group of stocks' market valuations resemble CHTR's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JD,75,11309916,-14 RY,18,716039,0 SNE,27,541868,-1 AZN,34,2660857,-7 SBUX,61,4442448,-6 CAT,53,4956227,0 BUD,18,979916,0 Average,40.9,3658182,-4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 40.9 hedge funds with bullish positions and the average amount invested in these stocks was $3658 million. That figure was $16399 million in CHTR's case. JD.Com Inc (NASDAQ:JD) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 18 bullish hedge fund positions. Charter Communications, Inc. (NASDAQ:CHTR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CHTR is 54.7. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Hedge funds were also right about betting on CHTR as the stock returned 11.3% since the end of Q1 (through 6/11) 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.

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