In this article we will analyze whether Charter Communications, Inc. (NASDAQ:CHTR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is CHTR stock a buy or sell? Charter Communications, Inc. (NASDAQ:CHTR) was in 90 hedge funds’ portfolios at the end of December. The all time high for this statistic is 134. CHTR investors should be aware of an increase in support from the world’s most elite money managers lately. There were 88 hedge funds in our database with CHTR holdings at the end of September. Our calculations also showed that CHTR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. 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 homepage (or at the end of this article). With all of this in mind we’re going to take a look at the fresh hedge fund action regarding Charter Communications, Inc. (NASDAQ:CHTR).
Do Hedge Funds Think CHTR Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 90 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. By comparison, 65 hedge funds held shares or bullish call options in CHTR a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Charter Communications, Inc. (NASDAQ:CHTR) was held by Berkshire Hathaway, which reported holding $3449 million worth of stock at the end of December. It was followed by Egerton Capital Limited with a $1144.3 million position. Other investors bullish on the company included BlueSpruce Investments, AltaRock Partners, and Third Point. In terms of the portfolio weights assigned to each position Triple Frond Partners allocated the biggest weight to Charter Communications, Inc. (NASDAQ:CHTR), around 25.62% of its 13F portfolio. AltaRock Partners is also relatively very bullish on the stock, dishing out 24.81 percent of its 13F equity portfolio to CHTR.
Now, key money managers have jumped into Charter Communications, Inc. (NASDAQ:CHTR) headfirst. Anomaly Capital Management, managed by Ben Jacobs, established the biggest position in Charter Communications, Inc. (NASDAQ:CHTR). Anomaly Capital Management had $29.4 million invested in the company at the end of the quarter. Joseph Samuels’s Islet Management also made a $14.9 million investment in the stock during the quarter. The following funds were also among the new CHTR investors: Clayton Gardner and Joe Percoco’s Titan Global Capital, Joshua Pearl’s Hickory Lane Capital Management, and Louis Bacon’s Moore Global Investments.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Charter Communications, Inc. (NASDAQ:CHTR) but similarly valued. We will take a look at Sanofi (NASDAQ:SNY), Lowe’s Companies, Inc. (NYSE:LOW), Linde plc (NYSE:LIN), Shopify Inc (NYSE:SHOP), Royal Dutch Shell plc (NYSE:RDS), Philip Morris International Inc. (NYSE:PM), and Honeywell International Inc. (NYSE:HON). This group of stocks’ market valuations resemble CHTR’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 51 hedge funds with bullish positions and the average amount invested in these stocks was $3726 million. That figure was $11275 million in CHTR’s case. Shopify Inc (NYSE:SHOP) is the most popular stock in this table. On the other hand Sanofi (NASDAQ:SNY) is the least popular one with only 15 bullish hedge fund positions. Charter Communications, Inc. (NASDAQ:CHTR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CHTR is 77.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and beat the market again by 1.6 percentage points. Unfortunately CHTR wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on CHTR were disappointed as the stock returned -5.7% since the end of December (through 3/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Disclosure: None. This article was originally published at Insider Monkey.