Hedge Funds Aren’t Crazy About Cincinnati Bell Inc. (CBB) Anymore

Should Cincinnati Bell Inc. (NYSE:CBB) investors track the following data?

In the financial world, there are a multitude of methods market participants can use to watch their holdings. A couple of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the market by a significant margin (see just how much).

Equally as crucial, optimistic insider trading sentiment is a second way to analyze the world of equities. Just as you’d expect, there are a variety of incentives for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” know what to do (learn more here).

Cincinnati Bell Inc. (NYSE:CBB)

Keeping this in mind, we’re going to examine the latest info for Cincinnati Bell Inc. (NYSE:CBB).

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

At the end of the second quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of -30% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.

According to our 13F database, GAMCO Investors, managed by Mario Gabelli, holds the largest position in Cincinnati Bell Inc. (NYSE:CBB). GAMCO Investors has a $40.6 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Yale M. Fergang and Robert W. Medway of Royal Capital, with a $19.1 million position; the fund has 6.6% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

As Cincinnati Bell Inc. (NYSE:CBB) has faced bearish sentiment from the top-tier hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers who were dropping their full holdings heading into Q2. At the top of the heap, Ryan Schaper’s Point Lobos Capital sold off the biggest investment of the “upper crust” of funds we watch, worth about $11.2 million in stock. Matthew Knauer and Mina Faltas’s fund, Nokota Management, also cut its stock, about $4.9 million worth. These moves are interesting, as aggregate hedge fund interest fell by 6 funds heading into Q2.

What do corporate executives and insiders think about Cincinnati Bell Inc. (NYSE:CBB)?

Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the last six-month time period, Cincinnati Bell Inc. (NYSE:CBB) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators 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). This group of stocks are in the telecom services – domestic industry and their market caps resemble CBB’s market cap.