Hedge Funds Are Dumping Telephone & Data Systems, Inc. (TDS)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Telephone & Data Systems, Inc. (NYSE:TDS).

Telephone & Data Systems, Inc. (NYSE:TDS) was in 24 hedge funds’ portfolios at the end of September. Telephone & Data Systems, Inc. (NYSE:TDS) has seen a decrease in hedge fund sentiment lately. There were 25 hedge funds in our database with Telephone & Data Systems, Inc. (NYSE:TDS) 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 Ascena Retail Group Inc (NASDAQ:ASNA), Crane Co. (NYSE:CR), and Thor Industries, Inc. (NYSE:THO) to gather more data points.

To most investors, hedge funds are seen as unimportant, old investment vehicles of the past. While there are over 8000 funds in operation at the moment, We look at the bigwigs of this group, approximately 700 funds. It is estimated that this group of investors commands bulk of the hedge fund industry’s total capital, and by tailing their highest performing stock picks, Insider Monkey has uncovered many investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points annually for a decade in their back tests.

With all of this in mind, we’re going to analyze the new action regarding Telephone & Data Systems, Inc. (NYSE:TDS).

What have hedge funds been doing with Telephone & Data Systems, Inc. (NYSE:TDS)?

At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 4% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the largest position in Telephone & Data Systems, Inc. (NYSE:TDS). GAMCO Investors has a $98.2 million position in the stock, comprising 0.6% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, with a $60 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions include Israel Englander’s Millennium Management, Chuck Royce’s Royce & Associates, and Cliff Asness’ AQR Capital Management.

Seeing as Telephone & Data Systems, Inc. (NYSE:TDS) has witnessed a falling interest from hedge fund managers, we can see that there lies a certain “tier” of funds who were dropping their full holdings heading into Q4. Intriguingly, Millennium Management Subsidiary’s Blue Arrow Capital Management cut the biggest investment of the 700 funds watched by Insider Monkey, valued at close to $3.2 million in call options., and Buckley Ratchford’s Wingspan Investment Management was right behind this move, as the fund dropped about $1 million worth of shares. These moves are important to note, as total hedge fund interest was cut by 1 fund heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Telephone & Data Systems, Inc. (NYSE:TDS) but similarly valued. We will take a look at Ascena Retail Group Inc (NASDAQ:ASNA), Crane Co. (NYSE:CR), Thor Industries, Inc. (NYSE:THO), and First Citizens BancShares Inc. (NASDAQ:FCNCA). This group of stocks’ market valuations is closest to Telephone & Data Systems, Inc. (NYSE:TDS)’s market valuation.

As you can see, these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $275 million. That figure was $288 million in Telephone & Data Systems, Inc. (NYSE:TDS)’s case. Ascena Retail Group Inc (NASDAQ:ASNA) is the most popular stock in this table. On the other hand, First Citizens BancShares Inc. (NASDAQ:FCNCA) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks, Telephone & Data Systems, Inc. (NYSE:TDS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.