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 Altice USA, Inc. (NYSE:ATUS) and determine whether the smart money was really smart about this stock.
Altice USA, Inc. (NYSE:ATUS) was in 59 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 62. ATUS shareholders have witnessed an increase in support from the world’s most elite money managers of late. There were 44 hedge funds in our database with ATUS holdings at the end of June. Our calculations also showed that ATUS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Parag Vora of HG Vora Capital Management
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 we’re going to analyze the latest hedge fund action regarding Altice USA, Inc. (NYSE:ATUS).
Do Hedge Funds Think ATUS Is A Good Stock To Buy Now?
At Q3’s end, a total of 59 of the hedge funds tracked by Insider Monkey were long this stock, a change of 34% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in ATUS over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Among these funds, HG Vora Capital Management held the most valuable stake in Altice USA, Inc. (NYSE:ATUS), which was worth $145 million at the end of the third quarter. On the second spot was Palestra Capital Management which amassed $138.2 million worth of shares. Pelham Capital, Simcoe Capital Management, and Senator Investment Group 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 Simcoe Capital Management allocated the biggest weight to Altice USA, Inc. (NYSE:ATUS), around 9.11% of its 13F portfolio. Simcoe Capital Management is also relatively very bullish on the stock, earmarking 6.23 percent of its 13F equity portfolio to ATUS.
Now, key hedge funds were breaking ground themselves. HG Vora Capital Management, managed by Parag Vora, initiated the biggest position in Altice USA, Inc. (NYSE:ATUS). HG Vora Capital Management had $145 million invested in the company at the end of the quarter. Jonathan Kolatch’s Redwood Capital Management also made a $48.5 million investment in the stock during the quarter. The other funds with brand new ATUS positions are Jeffrey Tannenbaum’s Fir Tree, Anthony Bozza’s Lakewood Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Altice USA, Inc. (NYSE:ATUS) but similarly valued. These stocks are CAE, Inc. (NYSE:CAE), China Southern Airlines Co Ltd (NYSE:ZNH), Newell Brands Inc. (NYSE:NWL), Texas Pacific Land Trust (NYSE:TPL), Life Storage, Inc. (NYSE:LSI), Cree, Inc. (NASDAQ:CREE), and Lear Corporation (NYSE:LEA). This group of stocks’ market caps match ATUS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAE | 7 | 83687 | -3 |
| ZNH | 3 | 8197 | 1 |
| NWL | 26 | 1635531 | 1 |
| TPL | 24 | 1973702 | 3 |
| LSI | 24 | 326658 | 3 |
| CREE | 21 | 246808 | -10 |
| LEA | 32 | 1191330 | -2 |
| Average | 19.6 | 780845 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $781 million. That figure was $1168 million in ATUS’s case. Lear Corporation (NYSE:LEA) is the most popular stock in this table. On the other hand China Southern Airlines Co Ltd (NYSE:ZNH) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Altice USA, Inc. (NYSE:ATUS) is more popular among hedge funds. Our overall hedge fund sentiment score for ATUS is 88.5. 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. 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 still beat the market by 3.6 percentage points. Unfortunately, ATUS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ATUS were disappointed as the stock returned -30.4% since the end of the third quarter (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 Altice Usa Inc. (NYSE:ATUS)
Follow Altice Usa Inc. (NYSE:ATUS)
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Disclosure: None. This article was originally published at Insider Monkey.
