Is Crown Castle International Corp. (CCI) a Good Stock To Buy?

Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we will analyze Crown Castle International Corp. (NYSE:CCI) from the perspective of those elite funds.

Is Crown Castle International Corp. (NYSE:CCI) a good stock to buy now? Money managers seem to be in a slightly pessimistic mood, as the number of investors with long positions retreated by two during the third quarter. In this way, 42 funds from our database held shares of Crown Castle International at the end of September. However, 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 Canadian Natural Resource Ltd (USA) (NYSE:CNQ), Yum! Brands, Inc. (NYSE:YUM), and Estee Lauder Companies Inc (NYSE:EL) to gather more data points.

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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Now, we’re going to take a look at the latest action regarding Crown Castle International Corp. (NYSE:CCI).

Hedge fund activity in Crown Castle International Corp. (NYSE:CCI)

As stated earlier, a total of 42 of the hedge funds tracked by Insider Monkey held long positions in Crown Castle at the end of September, down by 5% from the end of the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Michael Larson’s Bill & Melinda Gates Foundation Trust has the most valuable position in Crown Castle International Corp. (NYSE:CCI), worth close to $502.4 million, amounting to 2.7% of its total 13F portfolio. On Bill & Melinda Gates Foundation Trust’s heels is Jacob Doft of Highline Capital Management, with a $184.2 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Robert Joseph Caruso’s Select Equity Group.

Due to the fact that Crown Castle International Corp. (NYSE:CCI) has faced a decline in interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies that slashed their positions entirely last quarter. Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management cut the largest position of the 700 funds monitored by Insider Monkey, valued at about $57 million, and Daniel S. Och’s OZ Management was right behind this move, as the fund cut about $33.9 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Crown Castle International Corp. (NYSE:CCI). These stocks are Canadian Natural Resource Ltd (USA) (NYSE:CNQ), Yum! Brands, Inc. (NYSE:YUM), Estee Lauder Companies Inc (NYSE:EL), and Emerson Electric Co. (NYSE:EMR). This group of stocks’ market caps resemble CCI’s market cap.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1.40 billion. That figure was $1.96 billion in CCI’s case. Yum! Brands, Inc. (NYSE:YUM) is the most popular stock in this table with 42 funds holding shares. On the other hand Canadian Natural Resource Ltd (USA) (NYSE:CNQ) is the least popular one with only 21 bullish hedge fund positions. Crown Castle International Corp. (NYSE:CCI) 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 Yum! Brands, Inc. (NYSE:YUM) might be a better candidate to consider a long position.