In this article you are going to find out whether hedge funds think Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is CCO a good stock to buy now? Money managers were in an optimistic mood. The number of long hedge fund bets moved up by 3 recently. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) was in 30 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 44. Our calculations also showed that CCO 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). There were 27 hedge funds in our database with CCO positions at the end of the second quarter.
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.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. With all of this in mind we’re going to review the latest hedge fund action regarding Clear Channel Outdoor Holdings, Inc. (NYSE:CCO).
Do Hedge Funds Think CCO Is A Good Stock To Buy Now?
At third quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CCO over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Mason Capital Management was the largest shareholder of Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), with a stake worth $35.8 million reported as of the end of September. Trailing Mason Capital Management was Brigade Capital, which amassed a stake valued at $18.4 million. D E Shaw, Rubric Capital Management, and Contrarian Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Mason Capital Management allocated the biggest weight to Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), around 3.15% of its 13F portfolio. Contrarian Capital is also relatively very bullish on the stock, setting aside 2.19 percent of its 13F equity portfolio to CCO.
With a general bullishness amongst the heavyweights, some big names have jumped into Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) headfirst. Lonestar Capital Management, managed by Jerome L. Simon, created the most valuable position in Clear Channel Outdoor Holdings, Inc. (NYSE:CCO). Lonestar Capital Management had $2.4 million invested in the company at the end of the quarter. Austin Wiggins Hopper’s AWH Capital also initiated a $0.6 million position during the quarter. The other funds with new positions in the stock are Michael Gelband’s ExodusPoint Capital, Marc Majzner’s Clearline Capital, and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) but similarly valued. We will take a look at AxoGen, Inc. (NASDAQ:AXGN), Applied Therapeutics, Inc. (NASDAQ:APLT), Brookdale Senior Living, Inc. (NYSE:BKD), Pacific Ethanol Inc (NASDAQ:PEIX), WisdomTree Investments, Inc. (NASDAQ:WETF), Renalytix AI plc (NASDAQ:RNLX), and Trevena Inc (NASDAQ:TRVN). All of these stocks’ market caps are closest to CCO’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $121 million in CCO’s case. WisdomTree Investments, Inc. (NASDAQ:WETF) is the most popular stock in this table. On the other hand Renalytix AI plc (NASDAQ:RNLX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is more popular among hedge funds. Our overall hedge fund sentiment score for CCO is 78.5. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 33.3% in 2020 through December 18th but still managed to beat the market by 16.4 percentage points. Hedge funds were also right about betting on CCO as the stock returned 51% since the end of September (through 12/18) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.