3. Sierra Wireless, Inc. (NASDAQ:SWIR)
Number of Hedge Fund Holders: 23
YTD Share Price Gain as of September 15: 74.86%
Sierra Wireless, Inc. (NASDAQ:SWIR) was incorporated in 1993 and is headquartered in Richmond, Canada. The company provides device-to-cloud Internet of Things solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company announced Q2 non-GAAP earnings per share of $0.43 and a revenue of $187.95 million, topping market forecasts by $0.15 and $13.5 million, respectively. Sierra Wireless, Inc. (NASDAQ:SWIR) experienced solid demand and combatted supply chain tightness effectively, leading to positive June quarter results. The stock has gained about 75% year to date as of September 15.
TD Securities analyst Daniel Chan on August 4 downgraded Sierra Wireless, Inc. (NASDAQ:SWIR) to Tender from Hold with a price target of $31, up from $22, after the company announced that it will be acquired by Semtech Corporation (NASDAQ:SMTC) for $31 per share. The analyst believes that the proposed transaction is fair in value.
According to Insider Monkey’s Q2 data, 23 hedge funds were long Sierra Wireless, Inc. (NASDAQ:SWIR), compared to 19 funds in the prior quarter. Douglas T. Granat’s Trigran Investments is the biggest position holder in the company, with 4.45 million shares worth more than $104 million.
Here is what Voss Capital has to say about Sierra Wireless, Inc. (NASDAQ:SWIR) in its Q3 2021 investor letter:
“We have had some success by investing in hardware-to-software business transitions, specifically with Extreme Networks (EXTR), Avid Technologies (AVID), and PAR Technologies (PAR). Our underlying thesis has been that these transitions are less understood and perceived to be riskier than perpetual software to SaaS software conversion stories. Indeed, transition is typically longer and requires more fundamental disruption, as the hardware R&D/sales process is significantly different than a Perpetual License to SaaS change. However, if you have a large captive customer base and a competent management team to execute on the plan, the rewards can be even greater, since the company often starts from a much lower valuation than a traditional software company.
It is against this backdrop that we introduce a new core sized position (a 6.6% portfolio weight), Sierra Wireless (SWIR). Sierra Wireless has a long and winding corporate history. By our count, they have gone through eight total business pivots from their IPO at the height of the Internet bubble through today, leaving many long-term investors understandably skeptical of yet another strategy pivot by newly appointed CEO Phil Brace…” (Click here to read the full text)
