In October the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by about 4 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor (i.e. only 298 S&P 500 constituents were among the 500 most popular stocks among hedge funds), and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of T MOBILE US INC (NYSE:TMUS) and see how the stock is affected by the recent hedge fund activity. This is a stock that’s owned by billionaires George Soros, David Tepper, and Steve Cohen.
Is T MOBILE US INC (NYSE:TMUS) the right pick for your portfolio? The smart money is in an optimistic mood. The number of bullish hedge fund bets inched up by 15 lately. TMUS was in 68 hedge funds’ portfolios at the end of the second quarter of 2018. There were 53 hedge funds in our database with TMUS holdings at the end of the previous quarter. Moreover TMUS was also the 27th most popular stock among hedge funds at the end of the second quarter (see the list of 25 most popular stocks among hedge funds).
In the 21st century investor’s toolkit there are dozens of formulas market participants can use to size up publicly traded companies. Two of the most under-the-radar formulas are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass their index-focused peers by a superb amount. Insider Monkey’s flagship best performing hedge funds strategy returned 17.4% year to date and outperformed the market by more than 14 percentage points this year. This strategy also outperformed the market by 3 percentage points in the fourth quarter despite the market volatility (see the details here).
We’re going to analyze the new hedge fund action regarding T MOBILE US INC (NYSE:TMUS).
How have hedgies been trading T MOBILE US INC (NYSE:TMUS)?
At the end of the third quarter, a total of 68 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from one quarter earlier. By comparison, 60 hedge funds held shares or bullish call options in TMUS heading into this year. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of T MOBILE US INC (NYSE:TMUS), with a stake worth $470 millions reported as of the end of June. Trailing Citadel Investment Group was Maverick Capital, which amassed a stake valued at $307 millions. Tybourne Capital Management, Tekne Capital Management, and Kamunting Street Capital were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Jet Capital Investors, managed by Matthew Mark, created the largest position in T MOBILE US INC (NYSE:TMUS). Jet Capital Investors had $90.2 million invested in the company at the end of the quarter. Adam Fox and Samuel Elder’s Altalis Capital Partners also initiated a $4.8 million position during the quarter. The other funds with brand new TMUS positions are James Parsons’s Junto Capital Management, Anand Desai’s Darsana Capital Partners, and John Bader’s Halcyon Asset Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as T MOBILE US INC (NYSE:TMUS) but similarly valued. We will take a look at Banco Bradesco SA (ADR) (NYSE:BBD), Bank of Montreal (USA) (NYSE:BMO), Valero Energy Corporation (NYSE:VLO), and American International Group Inc (NYSE:AIG). This group of stocks’ market values are closest to TMUS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BBD | 15 | 522954 | 1 |
| BMO | 13 | 276070 | 3 |
| VLO | 32 | 1354748 | 4 |
| AIG | 36 | 1743070 | -17 |
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $974 million. That figure was $3751 million in TMUS’s case. American International Group Inc (NYSE:AIG) is the most popular stock in this table. On the other hand Bank of Montreal (USA) (NYSE:BMO) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks T MOBILE US INC (NYSE:TMUS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
