Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 15 S&P 500 stocks among hedge funds at the end of December 2018 yielded an average return of 19.7% year-to-date, vs. a gain of 13.1% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of American Tower Corporation (REIT) (NYSE:AMT).
Is American Tower Corporation (REIT) (NYSE:AMT) going to take off soon? Prominent investors are becoming less hopeful. The number of bullish hedge fund positions shrunk by 1 lately. Our calculations also showed that AMT isn't among the 30 most popular stocks among hedge funds.
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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's go over the fresh hedge fund action regarding American Tower Corporation (REIT) (NYSE:AMT).
How are hedge funds trading American Tower Corporation (REIT) (NYSE:AMT)?
At the end of the fourth quarter, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -2% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AMT over the last 14 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Akre Capital Management held the most valuable stake in American Tower Corporation (REIT) (NYSE:AMT), which was worth $1118 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $489.9 million worth of shares. Moreover, Cantillon Capital Management, Alkeon Capital Management, and AQR Capital Management were also bullish on American Tower Corporation (REIT) (NYSE:AMT), allocating a large percentage of their portfolios to this stock.
Because American Tower Corporation (REIT) (NYSE:AMT) has experienced declining sentiment from the smart money, it's safe to say that there exists a select few funds who were dropping their positions entirely last quarter. Interestingly, Gil Simon's SoMa Equity Partners sold off the biggest investment of the 700 funds followed by Insider Monkey, valued at about $76.8 million in stock, and Eric Bannasch's Cadian Capital was right behind this move, as the fund dumped about $55.2 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds last quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as American Tower Corporation (REIT) (NYSE:AMT) but similarly valued. These stocks are QUALCOMM, Incorporated (NASDAQ:QCOM), Morgan Stanley (NYSE:MS), Vale SA (NYSE:VALE), and Anthem Inc (NYSE:ANTM). This group of stocks' market valuations are closest to AMT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position QCOM,51,2269214,3 MS,57,4019419,6 VALE,33,2037385,-2 ANTM,67,5828271,4 Average,52,3538572,2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 52 hedge funds with bullish positions and the average amount invested in these stocks was $3539 million. That figure was $2590 million in AMT's case. Anthem Inc (NYSE:ANTM) is the most popular stock in this table. On the other hand Vale SA (NYSE:VALE) is the least popular one with only 33 bullish hedge fund positions. American Tower Corporation (REIT) (NYSE:AMT) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on AMT as the stock returned 14.6% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.