A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Millicom International Cellular S.A. (NASDAQ:TIGO).
Millicom International Cellular S.A. (NASDAQ:TIGO) was in 6 hedge funds' portfolios at the end of September. TIGO has experienced an increase in hedge fund sentiment of late. There were 5 hedge funds in our database with TIGO holdings at the end of the previous quarter. Our calculations also showed that TIGO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 Russell 2000 ETFs by 40 percentage points since May 2014 (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.
[caption id="attachment_375529" align="alignnone" width="600"] Mario Gabelli of GAMCO Investors[/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. Now we're going to view the key hedge fund action surrounding Millicom International Cellular S.A. (NASDAQ:TIGO).
Hedge fund activity in Millicom International Cellular S.A. (NASDAQ:TIGO)
At Q3's end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TIGO over the last 17 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GAMCO Investors was the largest shareholder of Millicom International Cellular S.A. (NASDAQ:TIGO), with a stake worth $54.3 million reported as of the end of September. Trailing GAMCO Investors was Cove Street Capital, which amassed a stake valued at $39.5 million. MD Sass, Renaissance Technologies, and Moon Capital 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 Cove Street Capital allocated the biggest weight to Millicom International Cellular S.A. (NASDAQ:TIGO), around 5.52% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, setting aside 0.45 percent of its 13F equity portfolio to TIGO.
Consequently, specific money managers were breaking ground themselves. Moon Capital, managed by John W. Moon, initiated the most outsized position in Millicom International Cellular S.A. (NASDAQ:TIGO). Moon Capital had $0.7 million invested in the company at the end of the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Millicom International Cellular S.A. (NASDAQ:TIGO) but similarly valued. We will take a look at Life Storage, Inc. (NYSE:LSI), Kirby Corporation (NYSE:KEX), 51job, Inc. (NASDAQ:JOBS), and United Microelectronics Corp (NYSE:UMC). This group of stocks' market valuations are closest to TIGO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LSI,15,226876,-5 KEX,20,663418,-3 JOBS,7,18805,-2 UMC,13,97504,1 Average,13.75,251651,-2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $252 million. That figure was $96 million in TIGO's case. Kirby Corporation (NYSE:KEX) is the most popular stock in this table. On the other hand 51job, Inc. (NASDAQ:JOBS) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Millicom International Cellular S.A. (NASDAQ:TIGO) is even less popular than JOBS. Hedge funds dodged a bullet by taking a bearish stance towards TIGO. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately TIGO wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); TIGO investors were disappointed as the stock returned -5.3% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.