Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
American Tower Corp (NYSE:AMT) investors should be aware of a decrease in support from the world’s most elite money managers recently. AMT was in 48 hedge funds’ portfolios at the end of September. There were 49 hedge funds in our database with AMT 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 UBS AG (USA) (NYSE:UBS), Dominion Resources, Inc. (NYSE:D), Adobe Systems Incorporated (NASDAQ:ADBE), and Express Scripts Holding Company (NASDAQ:ESRX) to gather more data points.
Follow American Tower Corp (NYSE:AMT)
Follow American Tower Corp (NYSE:AMT)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s take a look at the recent action surrounding American Tower Corp (NYSE:AMT).
What have hedge funds been doing with American Tower Corp (NYSE:AMT)?
At the end of the third quarter, a total of 48 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -2% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Akre Capital Management, managed by Charles Akre, holds the most valuable position in American Tower Corp (NYSE:AMT). Akre Capital Management has a $714.1 million position in the stock, comprising 13.7% of its 13F portfolio. Sitting at the No. 2 spot is Highfields Capital Management, managed by Jonathon Jacobson, which holds a $379.9 million position; 3.6% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism include Philippe Laffont’s Coatue Management, Panayotis Takis Sparaggis’s Alkeon Capital Management and William von Mueffling’s Cantillon Capital Management.
Since American Tower Corp (NYSE:AMT) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of funds that decided to sell off their full holdings last quarter. It’s worth mentioning that Doug Silverman and Alexander Klabin’s Senator Investment Group cut the largest stake of all the hedgies tracked by Insider Monkey, worth close to $34.1 million in call options. Ken Griffin’s fund, Citadel Investment Group, also dropped its call options, about $18.3 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 1 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to American Tower Corp (NYSE:AMT). These stocks are UBS AG (USA) (NYSE:UBS), Dominion Resources, Inc. (NYSE:D), Express Scripts Holding Company (NASDAQ:ESRX), and Adobe Systems Incorporated (NASDAQ:ADBE). This group of stocks’ market values are similar to AMT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UBS | 8 | 659901 | -2 |
| D | 20 | 292616 | 2 |
| ESRX | 52 | 2444668 | 1 |
| ADBE | 59 | 2867463 | 1 |
As you can see these stocks had an average of 34.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.56 billion. That figure was $2.92 billion in AMT’s case. Adobe Systems Incorporated (NASDAQ:ADBE) is the most popular stock in this table. On the other hand UBS AG (USA) (NYSE:UBS) 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 ADBE might be a better candidate to consider a long position.
