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Is China Telecom Corporation Limited (ADR) (CHA) A Good Stock To Buy?

Seeing as China Telecom Corporation Limited (ADR) (NYSE:CHA) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds that elected to cut their positions entirely by the end of the third quarter. Interestingly, David Costen Haley’s HBK Investments cut the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at about $0.3 million in stock, and Jane Mendillo’s Harvard Management Co was right behind this move, as the fund sold off about $0.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 1 fund by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to China Telecom Corporation Limited (ADR) (NYSE:CHA). These stocks are ABB Ltd (ADR) (NYSE:ABB), Credit Suisse Group AG (ADR) (NYSE:CS), LyondellBasell Industries NV (NYSE:LYB), and Suncor Energy Inc. (USA) (NYSE:SU). This group of stocks’ market caps are closest to CHA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ABB 9 163110 -2
CS 7 271645 1
LYB 57 3836230 -4
SU 28 1330765 -4

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $1400 million. That figure was $6 million in CHA’s case. LyondellBasell Industries NV (NYSE:LYB) is the most popular stock in this table. On the other hand Credit Suisse Group AG (ADR) (NYSE:CS) is the least popular one. Compared to these stocks China Telecom Corporation Limited (ADR) (NYSE:CHA), with only 4 bullish hedge fund points is even less popular than CS. To comprehend why the smart money isn’t behind this stock more detailed analyses are necessary. It is possible that investors found it overvalued because they were not familiar with the bullish thesis. In any case, further research is required.

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