The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded AT&T Inc. (NYSE:T) and determine whether the smart money was really smart about this stock.
Is AT&T Inc. (NYSE:T) a cheap investment right now? Money managers were turning less bullish. The number of long hedge fund positions were cut by 2 lately. AT&T Inc. (NYSE:T) was in 66 hedge funds’ portfolios at the end of September. The all time high for this statistic is 94. Our calculations also showed that T isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s review the new hedge fund action encompassing AT&T Inc. (NYSE:T).
Donald Sussman of Paloma Partners
Do Hedge Funds Think T Is A Good Stock To Buy Now?
At Q3’s end, a total of 66 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards T over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in AT&T Inc. (NYSE:T). Citadel Investment Group has a $939.6 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Israel Englander of Millennium Management, with a $484.4 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions contain John Overdeck and David Siegel’s Two Sigma Advisors, and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Kamunting Street Capital allocated the biggest weight to AT&T Inc. (NYSE:T), around 8.08% of its 13F portfolio. Kettle Hill Capital Management is also relatively very bullish on the stock, dishing out 4.12 percent of its 13F equity portfolio to T.
Since AT&T Inc. (NYSE:T) has witnessed a decline in interest from the smart money, we can see that there lies a certain “tier” of fund managers that decided to sell off their entire stakes heading into Q4. Intriguingly, Benjamin A. Smith’s Laurion Capital Management sold off the biggest position of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $68.1 million in stock. Stuart J. Zimmer’s fund, Zimmer Partners, also cut its stock, about $21.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as AT&T Inc. (NYSE:T) but similarly valued. We will take a look at AbbVie Inc (NYSE:ABBV), Wells Fargo & Company (NYSE:WFC), Merck & Co., Inc. (NYSE:MRK), AstraZeneca plc (NASDAQ:AZN), Novartis AG (NYSE:NVS), McDonald’s Corporation (NYSE:MCD), and Morgan Stanley (NYSE:MS). This group of stocks’ market caps are similar to T’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABBV | 81 | 4140050 | -1 |
| WFC | 88 | 6188279 | -6 |
| MRK | 77 | 4550626 | -2 |
| AZN | 41 | 3757394 | 4 |
| NVS | 22 | 1439973 | 0 |
| MCD | 58 | 3339098 | -8 |
| MS | 65 | 4990950 | -4 |
| Average | 61.7 | 4058053 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 61.7 hedge funds with bullish positions and the average amount invested in these stocks was $4058 million. That figure was $3212 million in T’s case. Wells Fargo & Company (NYSE:WFC) is the most popular stock in this table. On the other hand Novartis AG (NYSE:NVS) is the least popular one with only 22 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. Our overall hedge fund sentiment score for T is 57.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, T wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on T were disappointed as the stock returned -1.8% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow At&T Inc. (NYSE:T)
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Disclosure: None. This article was originally published at Insider Monkey.
