Do Hedge Funds and Insiders Love United States Cellular Corporation (USM)?

United States Cellular Corporation (NYSE:USM) was in 6 hedge funds’ portfolio at the end of March. USM shareholders have witnessed a decrease in hedge fund sentiment lately. There were 8 hedge funds in our database with USM holdings at the end of the previous quarter.

If you’d ask most traders, hedge funds are seen as worthless, old investment tools of the past. While there are more than 8000 funds with their doors open at the moment, we look at the elite of this club, around 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total capital, and by watching their top investments, we have determined a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as integral, bullish insider trading sentiment is a second way to break down the investments you’re interested in. There are a variety of stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” know where to look (learn more here).

With these “truths” under our belt, let’s take a gander at the latest action regarding United States Cellular Corporation (NYSE:USM).

Hedge fund activity in United States Cellular Corporation (NYSE:USM)

At the end of the first quarter, a total of 6 of the hedge funds we track held long positions in this stock, a change of -25% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially.

Of the funds we track, Mario Gabelli’s GAMCO Investors had the largest position in United States Cellular Corporation (NYSE:USM), worth close to $134.2 million, comprising 0.9% of its total 13F portfolio. The second largest stake is held by Charles de Vaulx of International Value Advisers, with a $19.5 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.

Seeing as United States Cellular Corporation (NYSE:USM) has experienced a declination in interest from the smart money, it’s easy to see that there lies a certain “tier” of fund managers that elected to cut their positions entirely last quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors dropped the biggest investment of the 450+ funds we track, comprising about $0.8 million in stock.. Paul Tudor Jones’s fund, Tudor Investment Corp, also cut its stock, about $0.7 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds last quarter.

What have insiders been doing with United States Cellular Corporation (NYSE:USM)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, United States Cellular Corporation (NYSE:USM) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to United States Cellular Corporation (NYSE:USM). These stocks are Clearwire Corporation (NASDAQ:CLWR), InterDigital, Inc. (NASDAQ:IDCC), Portugal Telecom, SGPS (ADR) (NYSE:PT), Telephone & Data Systems, Inc. (NYSE:TDS), and MetroPCS Communications Inc (NYSE:PCS). All of these stocks are in the wireless communications industry and their market caps resemble USM’s market cap.