Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about American Tower Corporation (NYSE:AMT) in this article.
Is AMT stock a buy or sell? American Tower Corporation (NYSE:AMT) investors should pay attention to a decrease in hedge fund sentiment in recent months. American Tower Corporation (NYSE:AMT) was in 61 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 62. Our calculations also showed that AMT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Charles Akre of Akre Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage (or at the end of this article). With all of this in mind let’s analyze the fresh hedge fund action encompassing American Tower Corporation (NYSE:AMT).
Do Hedge Funds Think AMT Is A Good Stock To Buy Now?
At Q4’s end, a total of 61 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -2% from the previous quarter. On the other hand, there were a total of 46 hedge funds with a bullish position in AMT a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Akre Capital Management was the largest shareholder of American Tower Corporation (NYSE:AMT), with a stake worth $1600.5 million reported as of the end of December. Trailing Akre Capital Management was Cantillon Capital Management, which amassed a stake valued at $463.8 million. D E Shaw, Fisher Asset Management, and Alkeon Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Akre Capital Management allocated the biggest weight to American Tower Corporation (NYSE:AMT), around 10.82% of its 13F portfolio. Heard Capital is also relatively very bullish on the stock, dishing out 10.24 percent of its 13F equity portfolio to AMT.
Because American Tower Corporation (NYSE:AMT) has experienced declining sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedgies who were dropping their positions entirely in the fourth quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest investment of the 750 funds monitored by Insider Monkey, totaling close to $19.2 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund dumped about $13.9 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds in the fourth quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as American Tower Corporation (NYSE:AMT) but similarly valued. We will take a look at The Charles Schwab Corporation (NYSE:SCHW), Lockheed Martin Corporation (NYSE:LMT), Caterpillar Inc. (NYSE:CAT), Square, Inc. (NYSE:SQ), American Express Company (NYSE:AXP), Zoom Video Communications, Inc. (NASDAQ:ZM), and The Estee Lauder Companies Inc (NYSE:EL). This group of stocks’ market values match AMT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SCHW | 61 | 4473211 | 8 |
| LMT | 53 | 2527739 | 6 |
| CAT | 53 | 4157844 | 12 |
| SQ | 89 | 8819199 | 16 |
| AXP | 60 | 21887073 | 12 |
| ZM | 59 | 6002261 | 3 |
| EL | 51 | 3593398 | 5 |
| Average | 60.9 | 7351532 | 8.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 60.9 hedge funds with bullish positions and the average amount invested in these stocks was $7352 million. That figure was $4726 million in AMT’s case. Square, Inc. (NYSE:SQ) is the most popular stock in this table. On the other hand The Estee Lauder Companies Inc (NYSE:EL) is the least popular one with only 51 bullish hedge fund positions. American Tower Corporation (NYSE:AMT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMT is 46.7. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately AMT wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on AMT were disappointed as the stock returned -1.2% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
