Here is What Hedge Funds Think About Windstream Holdings (WIN)

Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Windstream Holdings (NASDAQ:WIN).

Windstream Holdings (NASDAQ:WIN) investors should be aware of a decrease in support from the world’s most elite money managers of late. The shares of Windstream Holdings (NASDAQ:WIN) shared a similar sentiment, dropping 3.76% during the quarter. We will discuss hedge funds that held positions in the company, at the end of September.

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 Universal Electronics Inc (NASDAQ:UEIC), IAMGOLD Corporation (USA) (NYSE:IAG), and The Rubicon Project Inc (NYSE:RUBI) to gather more data points.

In the 21st century investor’s toolkit, there are plenty of tools shareholders use to value stocks. Some of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite fund managers can beat the market by a superb amount (see the details here).

Now, we’re going to take a glance at the recent action surrounding Windstream Holdings (NASDAQ:WIN).

How have hedgies been trading Windstream Holdings (NASDAQ:WIN)?

At the end of Q3, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a decrease of 48% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Tom Sandell’s Sandell Asset Management has the biggest position in Windstream Holdings (NASDAQ:WIN), worth close to $14.8 million, comprising 2.3% of its total 13F portfolio. The second most bullish fund manager is Paul Tudor Jones of Tudor Investment Corp, with a $12.8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers that are bullish include D E Shaw, Don Morgan’s Brigade Capital, and Jeffrey Bronchick’s Cove Street Capital.

Because Windstream Holdings (NASDAQ:WIN) has experienced a bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that slashed their positions entirely heading into Q4. Interestingly, Glenn Russell Dubin’s Highbridge Capital Management cut the largest stake of the “upper crust” of funds followed by Insider Monkey, valued at an estimated $6.9 million in stock, and David Warren’s DW Partners was right behind this move, as the fund said goodbye to about $3.5 million worth of shares. These moves are important to note, as total hedge fund interest dropped by 10 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Windstream Holdings (NASDAQ:WIN) but similarly valued. These stocks are Universal Electronics Inc (NASDAQ:UEIC), IAMGOLD Corporation (USA) (NYSE:IAG), The Rubicon Project Inc (NYSE:RUBI), and Constellium NV (NYSE:CSTM). This group of stocks’ market caps resemble Windstream Holdings (NASDAQ:WIN)’s market cap.

As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $47 million in Windstream Holdings (NASDAQ:WIN)’s case. Constellium NV (NYSE:CSTM) is the most popular stock in this table. On the other hand, IAMGOLD Corporation (USA) (NYSE:IAG) is the least popular one with only 9 bullish hedge fund positions. Windstream Holdings (NASDAQ:WIN) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Constellium NV (NYSE:CSTM) might be a better candidate to consider a long position.