Is Windstream Corporation (NASDAQ:WIN) a buy here? The best stock pickers are taking a bearish view. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
According to most shareholders, hedge funds are seen as worthless, old financial vehicles of the past. While there are more than 8000 funds with their doors open at present, we hone in on the aristocrats of this club, around 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total capital, and by keeping an eye on their highest performing equity investments, we have found a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as key, bullish insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are many reasons for an insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if piggybackers understand what to do (learn more here).
Consequently, let’s take a glance at the recent action regarding Windstream Corporation (NASDAQ:WIN).
Hedge fund activity in Windstream Corporation (NASDAQ:WIN)
In preparation for this year, a total of 9 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, Wayzata Investment Partners, managed by Patrick Halloran, holds the most valuable position in Windstream Corporation (NASDAQ:WIN). Wayzata Investment Partners has a $35 million position in the stock, comprising 4.5% of its 13F portfolio. Coming in second is James Dondero of Highland Capital Management, with a $19 million position; 0% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Brett Hendrickson’s Nokomis Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw.
Since Windstream Corporation (NASDAQ:WIN) has witnessed declining sentiment from the smart money, logic holds that there were a few hedge funds that elected to cut their entire stakes at the end of the year. Intriguingly, David Harding’s Winton Capital Management said goodbye to the largest stake of all the hedgies we monitor, totaling an estimated $3 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dropped about $0 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Windstream Corporation (NASDAQ:WIN)?
Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time frame, Windstream Corporation (NASDAQ:WIN) has seen 3 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Windstream Corporation (NASDAQ:WIN). These stocks are Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT), Atlantic Tele-Network, Inc. (NASDAQ:ATNI), CenturyLink, Inc. (NYSE:CTL), TW Telecom Inc (NASDAQ:TWTC), and Frontier Communications Corp (NASDAQ:FTR). All of these stocks are in the telecom services – domestic industry and their market caps resemble WIN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT) | 6 | 0 | 0 |
| Atlantic Tele-Network, Inc. (NASDAQ:ATNI) | 10 | 0 | 1 |
| CenturyLink, Inc. (NYSE:CTL) | 19 | 1 | 5 |
| TW Telecom Inc (NASDAQ:TWTC) | 25 | 0 | 9 |
| Frontier Communications Corp (NASDAQ:FTR) | 16 | 0 | 0 |
With the returns demonstrated by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Windstream Corporation (NASDAQ:WIN) is no exception.
