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Hedge Funds Aren’t Crazy About Cincinnati Bell Inc. (NYSE:CBB) Anymore – Shenandoah Telecommunications Company (NASDAQ:SHEN), Atlantic Tele-Network, Inc. (NASDAQ:ATNI)

Cincinnati Bell Inc. (NYSE:CBB) was in 13 hedge funds’ portfolio at the end of December. CBB has experienced a decrease in hedge fund sentiment in recent months. There were 13 hedge funds in our database with CBB holdings at the end of the previous quarter.

Cincinnati Bell Inc. (NYSE:CBB)

To the average investor, there are plenty of methods shareholders can use to watch their holdings. Some of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outpace the broader indices by a very impressive amount (see just how much).

Just as key, positive insider trading activity is a second way to break down the investments you’re interested in. Just as you’d expect, there are a number of motivations for a corporate insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).

Consequently, we’re going to take a glance at the latest action surrounding Cincinnati Bell Inc. (NYSE:CBB).

What have hedge funds been doing with Cincinnati Bell Inc. (NYSE:CBB)?

At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Marcato Capital Management, managed by Richard McGuire, holds the largest position in Cincinnati Bell Inc. (NYSE:CBB). Marcato Capital Management has a $93 million position in the stock, comprising 12.1% of its 13F portfolio. The second largest stake is held by GAMCO Investors, managed by Mario Gabelli, which held a $75 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Yale M. Fergang and Robert W. Medway’s Royal Capital, Israel Englander’s Millennium Management and Douglas Hirsch’s Seneca Capital.

Seeing as Cincinnati Bell Inc. (NYSE:CBB) has experienced falling interest from the smart money, it’s safe to say that there lies a certain “tier” of money managers who were dropping their entire stakes heading into 2013. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest stake of the 450+ funds we monitor, totaling about $2 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund cut about $1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Cincinnati Bell Inc. (NYSE:CBB)?

Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time period, Cincinnati Bell Inc. (NYSE:CBB) has seen 2 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Cincinnati Bell Inc. (NYSE:CBB). These stocks are magicJack VocalTec Ltd (NASDAQ:CALL), Shenandoah Telecommunications Company (NASDAQ:SHEN), EarthLink, Inc. (NASDAQ:ELNK), Atlantic Tele-Network, Inc. (NASDAQ:ATNI), and Consolidated Communications Holdings Inc (NASDAQ:CNSL). All of these stocks are in the telecom services – domestic industry and their market caps are closest to CBB’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
magicJack VocalTec Ltd (NASDAQ:CALL) 7 0 1
Shenandoah Telecommunications Company (NASDAQ:SHEN) 2 2 0
EarthLink, Inc. (NASDAQ:ELNK) 15 0 0
Atlantic Tele-Network, Inc. (NASDAQ:ATNI) 10 0 1
Consolidated Communications Holdings Inc (NASDAQ:CNSL) 4 0 2

With the returns demonstrated by our tactics, everyday investors must always monitor hedge fund and insider trading activity, and Cincinnati Bell Inc. (NYSE:CBB) is no exception.

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