Here is What Hedge Funds Think About Clear Channel Outdoor Holdings, Inc. (CCO)

Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.

One stock that has seen a slight increase in popularity among smart money investors is Clear Channel Outdoor Holdings, Inc. (NYSE:CCO). More specifically, during the third quarter, the number of funds followed by us long Clear Channel Outdoor appreciated to 16 from 15. At the end of this article we will also compare CCO to other stocks including WebMD Health Corp. (NASDAQ:WBMD), Cepheid (NASDAQ:CPHD), and New Gold Inc. (USA) (NYSEAMEX:NGD) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Keeping this in mind, we’re going to take a peek at the fresh action encompassing Clear Channel Outdoor Holdings, Inc. (NYSE:CCO).

How are hedge funds trading Clear Channel Outdoor Holdings, Inc. (NYSE:CCO)?

Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 7% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in CCO at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Joshua Friedman and Mitchell Julis’ Canyon Capital Advisors holds the biggest position in Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), which is worth $19.8 million. On Canyon Capital Advisors’ heels is David Abrams’ Abrams Capital Management, with a $19.6 million position; 1% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise David Warren’s DW Partners, Mario Gabelli’s GAMCO Investors, and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-microcap stocks.

Consequently, key money managers were breaking ground themselves. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital established the largest position in Clear Channel Outdoor Holdings, Inc. (NYSE:CCO). Arrowstreet Capital had $0.2 million invested in the company at the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to Clear Channel Outdoor Holdings, Inc. (NYSE:CCO). We will take a look at WebMD Health Corp. (NASDAQ:WBMD), Cepheid (NASDAQ:CPHD), New Gold Inc. (USA) (NYSEAMEX:NGD), and Visteon Corp (NYSE:VC). All of these stocks’ market caps resemble CCO’s market cap.

As you can see these stocks had an average of 26 investors with bullish positions and the average amount invested in these stocks was $420 million, compared to $74 million in CCO’s case. Cepheid (NASDAQ:CPHD) is the most popular stock in this table with 33 investors having reported long positions. On the other hand New Gold Inc. (USA) (NYSEAMEX:NGD) is the least popular one with only 15 bullish hedge fund positions. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Cepheid (NASDAQ:CPHD) might be a better candidate to consider taking a long position in.

Disclosure: None