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Hedge Funds Are Cashing Out Of Clear Channel Outdoor Holdings, Inc. (CCO)

·6 min read

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Clear Channel Outdoor Holdings, Inc. (NYSE:CCO).

Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) was in 27 hedge funds' portfolios at the end of June. The all time high for this statistic is 44. CCO shareholders have witnessed a decrease in support from the world's most elite money managers of late. There were 29 hedge funds in our database with CCO positions at the end of the first quarter. Our calculations also showed that CCO isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Bruce Kovner, Caxton Associates LP
Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

At Insider Monkey, we scour multiple sources to uncover 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 EV 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. Keeping this in mind we're going to go over the latest hedge fund action encompassing Clear Channel Outdoor Holdings, Inc. (NYSE:CCO).

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

Heading into the third quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the first quarter of 2020. On the other hand, there were a total of 27 hedge funds with a bullish position in CCO a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CCO A Good Stock To Buy?
Is CCO A Good Stock To Buy?

The largest stake in Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) was held by Mason Capital Management, which reported holding $58.1 million worth of stock at the end of June. It was followed by Legion Partners Asset Management with a $39 million position. Other investors bullish on the company included Brigade Capital, Rubric Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Legion Partners Asset Management allocated the biggest weight to Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), around 7.84% of its 13F portfolio. Mason Capital Management is also relatively very bullish on the stock, earmarking 3.6 percent of its 13F equity portfolio to CCO.

Because Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) has experienced a decline in interest from hedge fund managers, we can see that there lies a certain "tier" of hedge funds that decided to sell off their entire stakes heading into Q3. Intriguingly, Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital) dropped the biggest stake of the 750 funds tracked by Insider Monkey, worth close to $0.6 million in stock, and Nick Thakore's Diametric Capital was right behind this move, as the fund cut about $0.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q3.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) but similarly valued. We will take a look at Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), OrthoPediatrics Corp. (NASDAQ:KIDS), Impinj, Inc. (NASDAQ:PI), Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX), Upland Software Inc (NASDAQ:UPLD), BellRing Brands, Inc. (NYSE:BRBR), and Arcos Dorados Holding Inc (NYSE:ARCO). This group of stocks' market values match CCO's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRHC,4,15108,-3 KIDS,10,25879,2 PI,20,379200,2 FMTX,13,521201,-4 UPLD,19,221503,0 BRBR,16,239746,2 ARCO,10,40185,-2 Average,13.1,206117,-0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $206 million. That figure was $253 million in CCO's case. Impinj, Inc. (NASDAQ:PI) is the most popular stock in this table. On the other hand Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is more popular among hedge funds. Our overall hedge fund sentiment score for CCO is 71.4. 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 returned 24.9% in 2021 through October 15th but still managed to beat the market by 4.5 percentage points. Hedge funds were also right about betting on CCO as the stock returned 1.9% since the end of June (through 10/15) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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