Before we spend countless hours researching a company, we'd like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so 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 Consolidated Communications Holdings Inc (NASDAQ:CNSL).
Consolidated Communications Holdings Inc (NASDAQ:CNSL) was in 14 hedge funds' portfolios at the end of the fourth quarter of 2018. CNSL shareholders have witnessed an increase in hedge fund interest of late. There were 10 hedge funds in our database with CNSL holdings at the end of the previous quarter. Our calculations also showed that CNSL isn't among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a gander at the key hedge fund action surrounding Consolidated Communications Holdings Inc (NASDAQ:CNSL).
Hedge fund activity in Consolidated Communications Holdings Inc (NASDAQ:CNSL)
At the end of the fourth quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from the second quarter of 2018. By comparison, 11 hedge funds held shares or bullish call options in CNSL 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 Consolidated Communications Holdings Inc (NASDAQ:CNSL) was held by Sirios Capital Management, which reported holding $3.8 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $1.4 million position. Other investors bullish on the company included Arrowstreet Capital, Millennium Management, and D E Shaw.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in Consolidated Communications Holdings Inc (NASDAQ:CNSL). Arrowstreet Capital had $1.4 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $1.3 million investment in the stock during the quarter. The other funds with brand new CNSL positions are Matthew Tewksbury's Stevens Capital Management, Jeffrey Talpins's Element Capital Management, and Benjamin A. Smith's Laurion Capital Management.
Let's now review hedge fund activity in other stocks similar to Consolidated Communications Holdings Inc (NASDAQ:CNSL). These stocks are Novavax, Inc. (NASDAQ:NVAX), Lakeland Bancorp, Inc. (NASDAQ:LBAI), Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX), and Central European Media Enterprises Ltd. (NASDAQ:CETV). All of these stocks' market caps are closest to CNSL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NVAX,13,29470,1 LBAI,12,59102,0 LXRX,11,10453,1 CETV,5,1243,-2 Average,10.25,25067,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $11 million in CNSL's case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand Central European Media Enterprises Ltd. (NASDAQ:CETV) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Consolidated Communications Holdings Inc (NASDAQ:CNSL) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately CNSL wasn't nearly as popular as these 15 stock and hedge funds that were betting on CNSL were disappointed as the stock returned -1.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.