Should You Consider Selling Crown Castle (CCI)?

Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. US markets continued their trend in the second quarter and the S&P 500 Index rose 4.28%. “Magnificent 7” drove the rally once again. The composite returned -1.55% gross of fees (‐1.61% net of fees) in the second quarter outperforming the ‐2.17% return of the Russell 1000 Value Index and trailing the 4.28% return of the S&P 500 Index. Security selection led the composite to outperform in the quarter relative to the Russell 1000 Value Index, while allocation effects detracted. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Aristotle Capital Value Equity Strategy highlighted stocks like Crown Castle Inc. (NYSE:CCI), in the second quarter 2024 investor letter. Crown Castle Inc. (NYSE:CCI) owns, operates, and leases cell towers and fiber-supporting small cells and fiber solutions. The one-month return of Crown Castle Inc. (NYSE:CCI) was -2.03%, and its shares lost 15.23% of their value over the last 52 weeks. On July 10, 2024, Crown Castle Inc. (NYSE:CCI) stock closed at $97.80 per share with a market capitalization of $42.496 billion.

Aristotle Capital Value Equity Strategy stated the following regarding Crown Castle Inc. (NYSE:CCI) in its Q2 2024 investor letter:

"We first invested in Crown Castle Inc. (NYSE:CCI), a provider of telecommunications infrastructure (including towers, fiber and small cells), in 2021. During our holding period, tenancy ratios for the company’s tower business increased. However, the company’s fiber and small cell business segments have yet to deliver the expected benefits from the 5G network transition. Additionally, the CEO of Crown Castle stepped down at the end of 2023, influenced by Elliott Investment Management, an activist investor. Concurrently, the company has initiated a strategic and operational review of its fiber segment to determine whether to pursue a turnaround or a complete/partial sale. Given the uncertainty surrounding the company’s business strategy and new management team, we decided to exit the investment. We will continue to monitor the company from the sidelines."

A close-up of an array of cell towers on a distant hilltop.

Crown Castle Inc. (NYSE:CCI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Crown Castle Inc. (NYSE:CCI) at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the potential of Crown Castle Inc. (NYSE:CCI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Crown Castle Inc. (NYSE:CCI) in another article and shared the list of stocks Jim Cramer is bearish on. Crown Castle Inc. (NYSE:CCI) is in 7th position on the list. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

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