Oaktree Buys $145 Million in TDS Stock Amid Wireless Exit and Turnaround Strategy
Key Points
Oaktree acquired nearly 3.7 million shares of TDS in the third quarter for an estimated $144.7 million.
The transaction value represents 2.2% of 13F reportable assets under management (AUM) at quarter-end.
The move creates one of Oaktree's largest new reported positions.
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On Thursday, Oaktree Capital Management disclosed a new position in Telephone and Data Systems (TDS), acquiring nearly 3.7 million shares for an estimated $144.7 million during the third quarter.
What Happened
According to a Securities and Exchange Commission (SEC) filing released on Thursday, Oaktree Capital Management initiated a new position in Telephone and Data Systems (NYSE:TDS) totaling nearly 3.7 million shares. The stake’s value at quarter-end was $144.7 million based on the fund’s reported 13F holdings. Oaktree’s total reportable U.S. equity assets stood at $6.5 billion across positions after the filing.
What Else to Know
This new position represents 2.2% of Oaktree’s 13F reportable AUM as of September 30, which places it outside the fund’s top five holdings.
Top holdings after the filing:
- NASDAQ:TRMD: $834.6 million (17.6% of AUM)
- NASDAQ:EXE: $537.8 million (11.3% of AUM)
- NASDAQ:GTX: $434.4 million (9.2% of AUM)
- NYSE:AU: $294.3 million (6.2% of AUM)
- NASDAQ:VNOM: $240.2 million (3.7% of AUM)
As of Thursday, shares of Telephone and Data Systems were priced at $38.70, up 25% over the prior year and outperforming the S&P 500's 13% gain in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $4.9 billion |
| Net Income (TTM) | $143.2 million |
| Dividend Yield | 0.41% |
| Price (as of market close Thursday) | $38.70 |
Company Snapshot
Telephone and Data Systems, Inc. is a diversified telecommunications provider offering wireless and wireline connectivity solutions in the United States. The company generates revenue primarily from wireless subscriptions, broadband internet, and related device sales and services across consumer, business, and government markets.
Foolish Take
Oaktree's $145 million stake in Telephone and Data Systems signals confidence in the telecom company’s ongoing restructuring and aggressive capital return strategy. The investment came just before TDS announced a $500 million share repurchase authorization, adding to its prior buyback program.
TDS’s third-quarter earnings, for example, showed a company in transition. After divesting its wireless business to T-Mobile in August, TDS recorded a sharp improvement in profitability—$40.2 million in quarterly net income, reversing a $100 million loss a year earlier. While revenue fell year-over-year to $308.5 million, fiber expansion at TDS Telecom remained a key growth driver, with 11,200 new fiber connections added in the quarter. The company also paid a $23-per-share special dividend following the sale.
For Oaktree, the move fits alongside other yield-oriented infrastructure plays like Viper Energy and AngloGold Ashanti. Though the stock has risen 25% over the past year, it remains well below multi-decade highs, leaving potential upside if TDS’s renewed strategy and focus continue to strengthen performance.
Glossary
13F reportable assets under management (AUM): The total value of U.S. equity holdings a fund must disclose in quarterly SEC Form 13F filings.
Position: The amount of a particular security or investment held by an investor or fund.
Stake: The ownership interest or share held in a company by an investor or fund.
Dividend yield: Annual dividend payments divided by the share price, expressed as a percentage.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Outperforming: Achieving a better return or performance than a benchmark, such as the S&P 500 index.
Annualized: A figure projected as if it applied for a full year, based on data from a shorter period.
Top holdings: The largest investments in a fund's portfolio, ranked by market value.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Quarter-end: The last day of a financial quarter, used for reporting and valuation purposes.
Reportable holdings: Investments that must be disclosed to regulators, typically due to size or regulatory requirements.
Filing: An official document submitted to a regulatory authority, often containing financial or investment disclosures.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Garrett Motion and Viper Energy. The Motley Fool has a disclosure policy.
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