Was smart money right about T-Mobile US, Inc. (TMUS)?

After several tireless days, we finished calculating the numbers for nearly 900 13F files issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed the stock portfolios of these companies as of June 30. The results of this effort will be exposed in this article, as we share valuable insight into smart money sentiment toward T-Mobile US, Inc. (NASDAQ: TMUS).

T-Mobile US, Inc. (NASDAQ: TMUS) has seen an increase in interest from hedge funds lately. T-Mobile US, Inc. (NASDAQ: TMUS) was listed in 100 hedge fund portfolios at the end of June. The all-time high for this statistic is 113. Our calculations also showed that TMUS ranked 19th among the 30 most popular stocks among hedge funds (click for Q2 rank).

Today there are many methods that shareholders use to analyze publicly traded companies. A duo of the more low-key methods is the sentiment of hedge funds and insider trading. Our researchers have shown that, historically, those who follow the best picks from the best fund managers can beat their index-driven peers by a superb amount (see details here). Additionally, our monthly newsletter’s long stock picks portfolio has returned 185.4% since March 2017 (through August 2021) and has beaten the S&P 500 Index by over 79 percentage points. You can download a sample issue of this newsletter from our website.

Ole Andreas Halvorsen Viking Global

Ole Andreas Halvorsen of Viking Global

With that in mind, let’s look at recent action from hedge funds encompassing T-Mobile US, Inc. (NASDAQ: TMUS).

Do hedge funds think TMUS is a good stock to buy now?

At the end of June, a total of 100 of the hedge funds tracked by Insider Monkey were long on this stock, a variation of 2% compared to the first quarter of 2020. The graph below shows the number of hedge funds with a bullish position on TMUS over the last 24 quarters. With the whirlwind of hedge fund sentiment, there is a “top tier” of outstanding hedge fund managers who were increasing their stakes significantly (or already building up large positions).

According to Insider Monkey’s hedge fund database, Viking Global, managed by Andreas Halvorsen, holds the number one position in T-Mobile US, Inc. (NASDAQ: TMUS). Viking Global holds a position of $ 1.0923 billion in the stock, representing 3.3% of its 13F portfolio. Sitting in second place is John Armitage of Egerton Capital Limited, with a position of $ 962.9 million; the fund has 4.8% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors who hold long positions include Berkshire Hathaway of Warren Buffett, Farallon Capital and D1 Capital Partners of Daniel Sundheim. In terms of the portfolio weights assigned to each position, BlueDrive Global Investors assigned the largest weight to T-Mobile US, Inc. (NASDAQ: TMUS), approximately 19.92% of its 13F portfolio. RIT Capital Partners is also relatively very bullish on the stock, setting aside 13.85% of its 13F equity portfolio at TMUS.

With a general uptrend among the heavyweights, specific fund managers were behind this uptrend. Tremblant Capital, managed by Brett Barakett, created the largest position in T-Mobile US, Inc. (NASDAQ: TMUS). Tremblant Capital had invested $ 128.6 million in the company at the end of the quarter. Josh Resnick’s Jericho Capital Asset Management also invested $ 84 million in the stock during the quarter. Other funds with new equity positions are Lakewood Capital Management by Anthony Bozza, Marc Lisker, Glenn Fuhrman and MSDC Management by John Phelan and Hitchwood Capital Management by James Crichton.

Now let’s review hedge fund activity in other stocks – not necessarily in the same industry as T-Mobile US, Inc. (NASDAQ: TMUS) but of similar value. We’ll be looking at Texas Instruments Incorporated (NASDAQ: TXN), Costco Wholesale Corporation (NASDAQ: COST), McDonald’s Corporation (NYSE: MCD), Morgan Stanley (NYSE: MS), Medtronic plc (NYSE: MDT), SAP SE (NYSE: SAP ) and QUALCOMM, Incorporated (NASDAQ: QCOM). The market value of this group of shares corresponds to the market value of TMUS.

[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position TXN, 50.2468540.8 COST, 54.4321174, -2 MCD, 66.2714779, -1 MS, 69.5347633, -10 MDT, 68 3390607.3 SAP, 17 1603691, -2 QCOM, 72 4047519, -1 Medium, 56.6.3413420, -0.7 [/table]

Check the table here if you have formatting issues.

As you can see, these stocks had an average of 56.6 hedge funds with bullish positions and the average amount invested in these stocks was $ 3,413 million. That figure was $ 8,021 million in the case of TMUS. QUALCOMM, Incorporated (NASDAQ: QCOM) is the most popular stock in this table. On the other hand, SAP SE (NYSE: SAP) is the least popular with only 17 bullish hedge fund positions. Compared to these stocks, T-Mobile US, Inc. (NASDAQ: TMUS) is more popular among hedge funds. Our overall hedge fund sentiment score for TMUS is 87.5. Stocks with a 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 the 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 26.3% in 2021 through October 29 and have consistently beaten the market by 2.3 percentage points. Unfortunately, TMUS was not as popular as these 5 stocks and the hedge funds that bet on TMUS were disappointed as the stock returned -20.6% since the end of the second quarter (through 10/29) and underperformed the market. If you want to invest in large cap stocks with huge upside potential, you should check out the 5 most popular stocks among hedge funds, as most of these stocks have already outperformed the market since 2019.

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Disclosure: none. This article originally appeared on Insider Monkey.

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