This Telecom Stock Is Up 19% This Past Year, so Why Did One Fund Just Exit?

By Jonathan Ponciano – Mar 18, 2026 at 1:19PM ESTKey PointsStonehill Capital sold its entire holding of 320,194 shares in Telephone and Data Systems during the fourth quarter.The quarter-end position value decreased by $12.56 million as a result of the exit.TDS was previously 4.48% of fund AUM last quarter.On February 17, 2026, Stonehill Capital Management reported in a Securities and Exchange Commission filing that it sold out of Telephone and Data Systems (TDS 2.20%) in the fourth quarter.What happenedAccording to a Securities and Exchange Commission filing dated February 17, 2026, Stonehill Capital Management sold all 320,194 shares of Telephone and Data Systems (TDS 2.20%). The fund’s TDS position value dropped by $12.56 million from the previous quarter as a result.What else to knowTop holdings after the filing:NASDAQ: SATS: $90.38 million (29.0% of AUM)NASDAQ: JOYY: $71.47 million (22.9% of AUM)NYSE: ELME: $30.25 million (9.7% of AUM)NASDAQ: LBRDK: $21.07 million (6.8% of AUM)NYSE: MBC: $19.65 million (6.3% of AUM)As of Wednesday, TDS shares were priced at $41.99, up about 19% over the past year, in line with the S&P 500’s gain in the same period.Company overviewMetricValueRevenue (TTM)$1.23 billionNet income (TTM)($75.5 million)Price (as of Wednesday)$41.99Company snapshotTDS has historically provided wireless solutions, broadband internet, cloud-based television, and voice services through its UScellular and TDS Telecom segments.The firm has generated revenue primarily from wireless subscriptions, broadband access, and related telecommunications services, leveraging a mix of direct retail, third-party, and digital sales channels.It serves consumers, businesses, and government entities across the United States, with a focus on both urban and rural markets.Telephone and Data Systems is a leading U.S. telecommunications provider with a diversified portfolio that has spanned wireless, broadband, and voice services. It operates at scale, supporting millions of wireless and wireline connections nationwide. Its integrated approach and broad service offering position it to address evolving connectivity needs across a wide customer base.What this transaction means for investorsShares of Telephone and Data Systems have done a good job of keeping up with the broader market, so the full sale here begs the question of why a fund would exit now.TDS is no longer a traditional telecom operator as investors might have once understood it. The company spent 2025 reshaping itself, offloading its wireless business and leaning into fiber and infrastructure. That shift is starting to show up in the numbers. Quarterly revenue rose to about $330.7 million, while net income jumped to $63.6 million from $7.2 million a year ago. For the full year, the company swung to a $20.2 million profit after posting a $26.5 million loss in 2024.Meanwhile, the company closed a $1.018 billion spectrum deal and paid a $10.25 special dividend, while doubling down on fiber with a long-term goal of reaching 2.1 million serviceable addresses. Placed next to top holdings that skew toward media, international platforms, and real estate, this name stood out as a transitional asset rather than a core conviction. Now, with the business at a pivotal moment, it seems Stonehill decided to turn attention elsewhere.About the AuthorJonathan Ponciano is a contributing stock market analyst at The Motley Fool. He has nearly a decade of experience as a financial journalist, most recently as an editor and senior reporter at Forbes focused on markets, technology, and entrepreneurship. Jonathan has also written for Investopedia and the Los Angeles Business Journal. He holds a dual B.A. in Business Journalism and Economics from the University of North Carolina at Chapel Hill and an M.B.A. from Columbia Business School. A North Carolina native now based in New York City, Jonathan has also lived in Mexico City and Los Angeles.CMFjonponcStocks MentionedTelephone And Data SystemsNYSE: TDS$41.83(-2.20%)-$0.94*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.