Should I Buy Crown Castle International Corp. (CCI)?

·5 min read

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Crown Castle International Corp. (NYSE:CCI) based on that data.

Crown Castle International Corp. (NYSE:CCI) was in 45 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 47. CCI has seen an increase in activity from the world's largest hedge funds of late. There were 42 hedge funds in our database with CCI positions at the end of the second quarter. Our calculations also showed that CCI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Stuart Zimmer Zimmer Partners
Stuart Zimmer Zimmer Partners

Stuart Zimmer of Zimmer Partners

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. With all of this in mind let's view the key hedge fund action regarding Crown Castle International Corp. (NYSE:CCI).

Do Hedge Funds Think CCI Is A Good Stock To Buy Now?

At third quarter's end, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CCI over the last 25 quarters. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

Is CCI A Good Stock To Buy?
Is CCI A Good Stock To Buy?

The largest stake in Crown Castle International Corp. (NYSE:CCI) was held by Bill & Melinda Gates Foundation Trust, which reported holding $791 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $425.6 million position. Other investors bullish on the company included D E Shaw, Millennium Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Skylands Capital allocated the biggest weight to Crown Castle International Corp. (NYSE:CCI), around 5.88% of its 13F portfolio. Bill & Melinda Gates Foundation Trust is also relatively very bullish on the stock, setting aside 3.41 percent of its 13F equity portfolio to CCI.

Consequently, key hedge funds have jumped into Crown Castle International Corp. (NYSE:CCI) headfirst. Renaissance Technologies, established the most outsized position in Crown Castle International Corp. (NYSE:CCI). Renaissance Technologies had $99.5 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $56.6 million investment in the stock during the quarter. The other funds with brand new CCI positions are Stuart J. Zimmer's Zimmer Partners, Paul Marshall and Ian Wace's Marshall Wace LLP, and Michael Gelband's ExodusPoint Capital.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Crown Castle International Corp. (NYSE:CCI) but similarly valued. These stocks are Chubb Limited (NYSE:CB), The Bank of Nova Scotia (NYSE:BNS), The Sherwin-Williams Company (NYSE:SHW), Capital One Financial Corp. (NYSE:COF), Fiserv, Inc. (NASDAQ:FISV), Equinix Inc (NASDAQ:EQIX), and Becton, Dickinson and Company (NYSE:BDX). This group of stocks' market caps are similar to CCI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CB,30,1272774,-12 BNS,17,193321,3 SHW,44,1576816,-5 COF,55,4708790,-9 FISV,65,3945223,-7 EQIX,31,1195457,-2 BDX,51,2339968,-1 Average,41.9,2176050,-4.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 41.9 hedge funds with bullish positions and the average amount invested in these stocks was $2176 million. That figure was $2089 million in CCI's case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 17 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. Our overall hedge fund sentiment score for CCI is 65.9. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately CCI wasn't nearly as popular as these 5 stocks and hedge funds that were betting on CCI were disappointed as the stock returned 4.8% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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