Do Hedge Funds Love Cellcom Israel Ltd. (CEL)?

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 Cellcom Israel Ltd. (NYSE:CEL) makes for a good investment right now.

Is Cellcom Israel Ltd. (NYSE:CEL) worth your attention right now? The best stock pickers are in a bearish mood. The number of long hedge fund positions retreated by 2 recently. CEL was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. There were 7 hedge funds in our database with CEL positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AtriCure Inc. (NASDAQ:ATRC), Universal Health Realty Income Trust (NYSE:UHT), and Fox Factory Holding Corp (NASDAQ:FOXF) to gather more data points.

To most market participants, hedge funds are seen as slow, outdated investment tools of years past. While there are greater than an 8000 funds trading at the moment, Our researchers hone in on the top tier of this group, around 700 funds. It is estimated that this group of investors control the lion’s share of the smart money’s total asset base, and by keeping track of their top investments, Insider Monkey has discovered many investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, we’re going to check out the recent action encompassing Cellcom Israel Ltd. (NYSE:CEL).

Hedge fund activity in Cellcom Israel Ltd. (NYSE:CEL)

At the Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies has the number one position in Cellcom Israel Ltd. (NYSE:CEL), worth close to $22.2 million, amounting to 0.1% of its total 13F portfolio. Coming in second is Richard Mashaal’s Rima Senvest Management, with a $2.3 million position; 0.2% of its 13F portfolio is allocated to the company. Other peers that are bullish comprise Matthew Hulsizer’s PEAK6 Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Due to the fact that Cellcom Israel Ltd. (NYSE:CEL) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds who sold off their entire stakes in the third quarter. Intriguingly, D. E. Shaw’s D E Shaw sold off the biggest position of all the hedgies tracked by Insider Monkey, valued at close to $0.3 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund dropped about $0.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Cellcom Israel Ltd. (NYSE:CEL). These stocks are AtriCure Inc. (NASDAQ:ATRC), Universal Health Realty Income Trust (NYSE:UHT), Fox Factory Holding Corp (NASDAQ:FOXF), and Community Trust Bancorp, Inc. (NASDAQ:CTBI). All of these stocks’ market caps are closest to CEL’s market cap.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $25 million in CEL’s case. AtriCure Inc. (NASDAQ:ATRC) is the most popular stock in this table, while Community Trust Bancorp, Inc. (NASDAQ:CTBI) is the least popular one with only 4 bullish hedge fund positions. Cellcom Israel Ltd. (NYSE:CEL) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ATRC might be a better candidate to consider a long position.