Is Time Warner Cable Inc (TWC) Going to Burn These Hedge Funds?

At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Time Warner Cable Inc (NYSE:TWC) makes for a good investment right now.

Time Warner Cable Inc (NYSE:TWC) investors should be aware of an increase in enthusiasm from smart money of late.

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In the 21st century investor’s toolkit there are several tools shareholders employ to evaluate publicly traded companies. A pair of the most useful tools are hedge fund and insider trading activity. Hedge fund experts at Insider Monkey have shown that, historically, those who follow the best picks of the elite money managers can outperform the market by a superb margin (see the details here).

Keeping this in mind, let’s check out the new action surrounding Time Warner Cable Inc (NYSE:TWC).

What have hedge funds been doing with Time Warner Cable Inc (NYSE:TWC)?

At the end of the third quarter, a total of 107 of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of 2% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly.

According to hedge fund intelligence website Insider Monkey, Paulson & Co, managed by John Paulson, holds the most valuable position in Time Warner Cable Inc (NYSE:TWC). Paulson & Co has a $1.457 billion position in the stock, comprising 7.6% of its 13F portfolio. Sitting at the No. 2 spot is Eric W. Mandelblatt of Soroban Capital Partners, with a $1.4058 billion position; the fund has 10.2% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Matthew Halbower’s Pentwater Capital Management and John Armitage’s Egerton Capital Limited.

As aggregate interest increased, some big names were leading the bulls’ herd. Mason Capital Management, managed by Kenneth Mario Garschina, created the biggest position in Time Warner Cable Inc (NYSE:TWC). Mason Capital Management had $233.6 million invested in the company at the end of the quarter. Dan Loeb’s Third Point also initiated a $233.2 million position during the quarter. The following funds were also among the new TWC investors: Alec Litowitz and Ross Laser’s Magnetar Capital, Vinit Bodas’s Deccan Value Advisors, and James Dinan’s York Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Time Warner Cable Inc (NYSE:TWC). We will take a look at Occidental Petroleum Corporation (NYSE:OXY), Enterprise Products Partners L.P. (NYSE:EPD), Duke Energy Corp (NYSE:DUK), and Target Corporation (NYSE:TGT). This group of stocks’ market valuations are similar to TWC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OXY 44 1371938 -2
EPD 21 210066 1
DUK 22 646270 1
TGT 44 1454433 0

With the results shown by our time-tested strategies, everyday investors should always monitor hedge fund activity, and Time Warner Cable Inc (NYSE:TWC) shareholders fit into this picture quite nicely. However, even though more hedge funds acquired shares of Time Warner in the third quarter, this is not a certain signal to go long, but rather than an emphasis to look into the stock.