Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Altice USA, Inc. (NYSE:ATUS) changed recently.
Is Altice USA, Inc. (NYSE:ATUS) a bargain? The smart money was getting more bullish. The number of long hedge fund bets improved by 15 recently. Altice USA, Inc. (NYSE:ATUS) was in 59 hedge funds’ portfolios at the end of September. The all time high for this statistic is 62. Our calculations also showed that ATUS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s take a gander at the latest hedge fund action regarding Altice USA, Inc. (NYSE:ATUS).
Parag Vora of HG Vora Capital Management
Do Hedge Funds Think ATUS Is A Good Stock To Buy Now?
At third quarter’s end, a total of 59 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 34% from the previous quarter. By comparison, 62 hedge funds held shares or bullish call options in ATUS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, HG Vora Capital Management was the largest shareholder of Altice USA, Inc. (NYSE:ATUS), with a stake worth $145 million reported as of the end of September. Trailing HG Vora Capital Management was Palestra Capital Management, which amassed a stake valued at $138.2 million. Pelham Capital, Simcoe Capital Management, and Senator Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Simcoe Capital Management allocated the biggest weight to Altice USA, Inc. (NYSE:ATUS), around 9.11% of its 13F portfolio. Simcoe Capital Management is also relatively very bullish on the stock, setting aside 6.23 percent of its 13F equity portfolio to ATUS.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. HG Vora Capital Management, managed by Parag Vora, initiated the biggest position in Altice USA, Inc. (NYSE:ATUS). HG Vora Capital Management had $145 million invested in the company at the end of the quarter. Jonathan Kolatch’s Redwood Capital Management also made a $48.5 million investment in the stock during the quarter. The following funds were also among the new ATUS investors: Jeffrey Tannenbaum’s Fir Tree, Anthony Bozza’s Lakewood Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Altice USA, Inc. (NYSE:ATUS) but similarly valued. These stocks are CAE, Inc. (NYSE:CAE), China Southern Airlines Co Ltd (NYSE:ZNH), Newell Brands Inc. (NASDAQ:NWL), Texas Pacific Land Corporation (NYSE:TPL), Life Storage, Inc. (NYSE:LSI), Cree, Inc. (NASDAQ:CREE), and Lear Corporation (NYSE:LEA). All of these stocks’ market caps match ATUS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAE | 7 | 83687 | -3 |
| ZNH | 3 | 8197 | 1 |
| NWL | 26 | 1635531 | 1 |
| TPL | 24 | 1973702 | 3 |
| LSI | 24 | 326658 | 3 |
| CREE | 21 | 246808 | -10 |
| LEA | 32 | 1191330 | -2 |
| Average | 19.6 | 780845 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $781 million. That figure was $1168 million in ATUS’s case. Lear Corporation (NYSE:LEA) is the most popular stock in this table. On the other hand China Southern Airlines Co Ltd (NYSE:ZNH) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Altice USA, Inc. (NYSE:ATUS) is more popular among hedge funds. Our overall hedge fund sentiment score for ATUS is 88.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately ATUS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ATUS were disappointed as the stock returned -23.6% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Altice Usa Inc. (NYSE:ATUS)
Follow Altice Usa Inc. (NYSE:ATUS)
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Disclosure: None. This article was originally published at Insider Monkey.
