Hedge Funds Are Buying American Tower Corp (AMT)

A market correction in the third quarter, spurred by a number of global macroeconomic concerns ended up having a negative impact on the markets and many hedge funds as a result. The stocks of smaller companies were especially hard hit during this time as investors fled to investments seen as being safer. This is evident in the fact that the Russell 2000 ETF underperformed the S&P 500 ETF by 14 percentage points between June 25 and the end of October. We also received indications that hedge funds were trimming their positions amid the market volatility and uncertainty, and given their greater inclination towards smaller cap stocks than other investors, it follows that a stronger sell-off occurred in those stocks. Let’s study the hedge fund sentiment to see how those concerns affected their ownership of American Tower Corp (NYSE:AMT) during the quarter.

American Tower Corp (NYSE:AMT) has experienced an increase in enthusiasm from smart money lately. American Tower Corp (NYSE:AMT) was in 42 hedge funds’ portfolios at the end of the third quarter of 2015. There were 39 hedge funds in our database with American Tower Corp (NYSE:AMT) holdings at the end of the previous quarter. At the end of this article, we will also compare American Tower Corp (NYSE:AMT) to other stocks, including Deutsche Bank AG (USA) (NYSE:DB), Anthem Inc (NYSE:ANTM), and Public Storage (NYSE:PSA) to get a better sense of its popularity.

In the 21st century investor’s toolkit, there are plenty of gauges stock traders have at their disposal to size up their holdings. A pair of the most useful gauges are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top money managers can outperform the S&P 500 by a superb amount (see the details here).

Now, let’s take a peek at the recent action surrounding American Tower Corp (NYSE:AMT).

How have hedgies been trading American Tower Corp (NYSE:AMT)?

At the end of the third quarter, a total of 42 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 8% from the second quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Charles Akre’s Akre Capital Management has the most valuable position in American Tower Corp (NYSE:AMT), worth close to $554.6 million, accounting for 12.9% of its total 13F portfolio. On Akre Capital Management’s heels is Highfields Capital Management, managed by Jonathon Jacobson, which holds a $292.3 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Doug Silverman and Alexander Klabin’s Senator Investment Group, Philippe Laffont’s Coatue Management, and Farallon Capital.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Matthew Tewksbury’s Stevens Capital Management made a $14.2 million investment in the stock during the quarter. The other funds with brand new American Tower Corp (NYSE:AMT) positions are Peter Muller’s PDT Partners, Rod Hinze’s KeyPoint Capital Management, and J. Alan Reid, Jr.’s Forward Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as American Tower Corp (NYSE:AMT) but similarly valued. These stocks are Deutsche Bank AG (USA) (NYSE:DB), Anthem Inc (NYSE:ANTM), Public Storage (NYSE:PSA), and PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ). This group of stocks’ market valuations matches American Tower Corp (NYSE:AMT)’s market valuation.

As you can see, these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $1.20 billion. That figure was $2.35 billion in American Tower Corp (NYSE:AMT)’s case. Anthem Inc (NYSE:ANTM) is the most popular stock in this table. On the other hand, Deutsche Bank AG (USA) (NYSE:DB) is the least popular one with only 8 bullish hedge fund positions. American Tower Corp (NYSE:AMT) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Anthem Inc (NYSE:ANTM) might be a better candidate to consider a long position.