Is CCI A Good Stock To Buy Now?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Crown Castle International Corp. (NYSE:CCI).

Is CCI a good stock to buy now? Crown Castle International Corp. (NYSE:CCI) was in 42 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 47. CCI investors should pay attention to a decrease in hedge fund interest lately. There were 43 hedge funds in our database with CCI positions at the end of the second quarter. Our calculations also showed that CCI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

CITADEL INVESTMENT GROUP

Ken Griffin of Citadel Investment Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let’s take a peek at the latest hedge fund action encompassing Crown Castle International Corp. (NYSE:CCI).

Do Hedge Funds Think CCI Is A Good Stock To Buy Now?

At third quarter’s end, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -2% from one quarter earlier. On the other hand, there were a total of 41 hedge funds with a bullish position in CCI a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Michael Larson’s Bill & Melinda Gates Foundation Trust has the largest position in Crown Castle International Corp. (NYSE:CCI), worth close to $887.9 million, amounting to 4% of its total 13F portfolio. On Bill & Melinda Gates Foundation Trust’s heels is Fisher Asset Management, led by Ken Fisher, holding a $324.3 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include D. E. Shaw’s D E Shaw, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Skylands Capital allocated the biggest weight to Crown Castle International Corp. (NYSE:CCI), around 8.7% of its 13F portfolio. Courage Capital is also relatively very bullish on the stock, designating 6.14 percent of its 13F equity portfolio to CCI.

Due to the fact that Crown Castle International Corp. (NYSE:CCI) has faced bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedgies that elected to cut their entire stakes in the third quarter. Interestingly, Andrew Weiss’s Weiss Asset Management dropped the biggest position of the 750 funds monitored by Insider Monkey, comprising about $97.1 million in stock. D. E. Shaw’s fund, D E Shaw, also dropped its stock, about $39.1 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Crown Castle International Corp. (NYSE:CCI) but similarly valued. We will take a look at Deere & Company (NYSE:DE), Goldman Sachs Group, Inc. (NYSE:GS), Fiserv, Inc. (NASDAQ:FISV), Anthem Inc (NYSE:ANTM), Becton, Dickinson and Company (NYSE:BDX), Equinix Inc (NASDAQ:EQIX), and The TJX Companies, Inc. (NYSE:TJX). This group of stocks’ market values resemble CCI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DE 42 1308976 10
GS 70 3633681 1
FISV 90 5404170 5
ANTM 65 4505466 -4
BDX 62 1939356 9
EQIX 42 2270352 -7
TJX 78 2853294 6
Average 64.1 3130756 2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 64.1 hedge funds with bullish positions and the average amount invested in these stocks was $3131 million. That figure was $2127 million in CCI’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand Deere & Company (NYSE:DE) is the least popular one with only 42 bullish hedge fund positions. Compared to these stocks Crown Castle International Corp. (NYSE:CCI) is even less popular than DE. Our overall hedge fund sentiment score for CCI is 30.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards CCI. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th but managed to beat the market again by 16.2 percentage points. Unfortunately CCI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CCI investors were disappointed as the stock returned -3.1% since the end of the third quarter (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.