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 AT&T Inc. (NYSE:T) makes for a good investment right now.
Is AT&T Inc. (NYSE:T) a buy, sell, or hold? Investors who are in the know are buying. The number of bullish hedge fund bets moved up by 11 lately. AT&T Inc. (NYSE:T) was in 60 hedge funds’ portfolios at the end of September. There were 49 hedge funds in our database with AT&T Inc. (NYSE:T) holdings 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 The Procter & Gamble Company (NYSE:PG), Pfizer Inc. (NYSE:PFE), and Toyota Motor Corporation (ADR) (NYSE:TM) to gather more data points.
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Today, there are several methods market participants employ to evaluate publicly traded companies. A pair of the most innovative methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the top fund managers can outpace the market by a significant margin (see the details here).
With all of this in mind, we’re going to take a glance at the key action surrounding AT&T Inc. (NYSE:T).
How are hedge funds trading AT&T Inc. (NYSE:T)?
Heading into Q4, a total of 60 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 22% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Berkshire Hathaway has the biggest position in AT&T Inc. (NYSE:T), worth close to $1.93 billion, comprising 1.5% of its total 13F portfolio. On Berkshire Hathaway’s heels is Phill Gross and Robert Atchinson of Adage Capital Management, with a $279.3 million position; the fund has 0.8% of its 13F portfolio invested in the stock. The remaining members of the smart money that hold long positions consist of Michael Messner’s Seminole Capital (Investment Mgmt), Mario Gabelli’s GAMCO Investors, and Israel Englander’s Millennium Management.
As one would reasonably expect, specific money managers have jumped into AT&T Inc. (NYSE:T) headfirst. John Overdeck and David Siegel’s Two Sigma Advisors made a $118.9 million investment in the stock during the quarter. The following funds were also among the new AT&T Inc. (NYSE:T) investors: Dmitry Balyasny’s Balyasny Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Jonathon Jacobson’s Highfields Capital Management.
Let’s also examine hedge fund activity in other stocks similar to AT&T Inc. (NYSE:T). These stocks are The Procter & Gamble Company (NYSE:PG), Pfizer Inc. (NYSE:PFE), Toyota Motor Corporation (ADR) (NYSE:TM), and Verizon Communications Inc. (NYSE:VZ). This group of stocks’ market valuations resembles AT&T Inc. (NYSE:T)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PG | 58 | 9063165 | 0 |
| PFE | 97 | 6090993 | 12 |
| TM | 13 | 229565 | 2 |
| VZ | 59 | 2525387 | -3 |
As you can see, these stocks had an average of 57 hedge funds with bullish positions and the average amount invested in these stocks was $4.48 billion. That figure was $3.76 billion in AT&T Inc. (NYSE:T)’s case. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table. On the other hand, Toyota Motor Corporation (ADR) (NYSE:TM) is the least popular one with only 13 bullish hedge fund positions. AT&T Inc. (NYSE:T) 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, Pfizer Inc. (NYSE:PFE) might be a better candidate to consider a long position.
