40 Hedge Funds' Best Stocks Show the Way for 2012 (Update 1)

Telecom

The telecom sector evokes yawns from the casual investor. Hedge fund managers, too, find little to be excited about in the sector. With telecom shares essentially flat in 2011 and down 2.5% this year through Feb. 15, investors bored with wireless companies look smart to have skipped over the sector.

The reasons for the aversion are simply because there's little growth to be had. FactSet Research has the telecom sector growing earnings by only 3% next year based on analysts' estimates, a far cry from the 22.3% expected earnings growth in financials or even 7.9% expected growth in consumer staples. Still, that's better than how telecom companies fared in the fourth quarter, when earnings dropped 23.7%, the lowest growth rate of all 10 sectors of the S&P 500.

Though certainly not the sexiest sector, some hedge fund managers increased their reported holdings during the fourth quarter. Ray Dalio's Bridgewater Associates initiated stakes in companies like BCE (BCE), SBA Communications (SBAC) and NII Holding (NIHD). Glenview Capital picked up shares of Crown Castle (CCI), Sprint Nextel (S) and Clearwire (CLWR).

Among other buyers, Paul Tudor Jones added to stakes in NII Holding, Clearwire, Vodafone (VOD) and MetroPCS (PCS).

On the other hand, Centaurus Capital dumped its stake in Level 3 Communications (LVLT) while Lone Pine Capital liquidated its position in NII Holding. Louis Bacon's Moore Capital sold its stakes in Verizon (VZ) and BCE (BCE).

>>To see these stocks in action, visit the Telecom Stocks Bought and Sold by Hedge Funds portfolio on Stockpickr.

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