While stocks from most industry sectors are still trying to recoup the losses they suffered at the start of 2016, several utility stocks are currently trading with double-digit gains this year. The outperformance of utilities can be gauged from the returns of S&P 500 Utilities sector, which is up by 12% year-to-date. In comparison the S&P 500 is trading marginally down for the year. Since utilities are on fire currently, we at Insider Monkey thought of compiling a list of the stocks from the sector based on their relative popularity among hedge funds covered by us at the end of the fourth quarter. Read further to know which are the five stocks that made it to the top of our list.
We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).
#5 T-Mobile US Inc (NASDAQ:TMUS)
– Investors with Long Positions (as of December 31): 50
– Aggregate Value of Investors’ Holdings (as of December 31): $2.41 billion
Let’s start with T-Mobile US Inc (NASDAQ:TMUS), which saw its ownership among hedge funds covered by us decline by four and the aggregate value of their holdings fall by $792 million during the fourth quarter. The shares of the ‘uncarrier’ had a major bull run in 2015, but have failed to continue it this year as they trade with year-to-date losses of over 7%. For its fourth quarter, the company reported EPS of $0.34 on revenue of $8.25 billion, beating analysts’ expectations of EPS of $0.15 on revenue of $8.20 billion. After refusing to join the company’s ‘Binge On’ program when it was launched three months ago, Alphabet Inc (NASDAQ:GOOGL) announced, on March 17, that its video platform YouTube and Google Play’s video content will now support the service. ‘Binge On’, which allows users to stream videos without any data charges, has been appreciated by consumers and investors, but some analysts are skeptical if the company can continue with this offer since it is going to hamper T-Mobile US Inc (NASDAQ:TMUS)’s network capacity significantly. Billionaire James Dinan‘s York Capital Management initiated a large stake in the company by purchasing over 3.26 million shares during the fourth quarter.