1. Iridium Communications Inc. (NASDAQ:IRDM)
Value of Anchor Capital Management’s 13F Position (3/31/2023): $16.3 million
Number of Hedge Fund Shareholders (12/31/2024): 33
Topping the list of Anchor Capital Management’s top stocks for 2024 is Iridium Communications Inc. (NASDAQ:IRDM). The provider of satellite services and products was already the fund’s top stock pick heading into this year and it further doubled down on it in Q1, raising its stake in IRDM by 48% to 623,941 shares. Among Anchor Capital Management’s top stock picks, Iridium is also the most popular among other hedge funds, with smart money ownership of the company rising by 22% during the fourth quarter of 2023.
Iridium Communications Inc. (NASDAQ:IRDM) shares are down near 52-week lows with the company in the midst of a strategic realignment that included cutting ties with QUALCOMM Incorporated (NASDAQ:QCOM). The company is now aiming to adapt its satellite protocols for integration with existing smartphones rather than rely on Qualcomm to develop compatible chips, a move which will ultimately expand the company’s total addressable market.
While its revenue is taking a hit in the near-term (down 1% to $204 million in Q1), long-focused investors like hedge funds are taking advantage of the opportunity to load up on Iridium shares with an eye towards the future, with Iridium poised to become a bigger player in the satellite services market on both smartphones and other mobile devices.
While noting the company’s near-term revenue uncertainty, Baron Partners Fund nonetheless believes in Iridium Communications Inc. (NASDAQ:IRDM)’s long-term trajectory, as the fund relayed in its Q4 2023 investor letter:
“The negative news for Iridium Communications Inc. (NASDAQ:IRDM) impacted its share price in the quarter. The timeline for Iridium’s direct-to-device offering has been prolonged. The company ended its exclusive relationship with Qualcomm and is now seeking other partners with whom to integrate its satellite direct to cellular chip. While this expands addressable customers, it has delayed the realization of revenue. While other aspects of Iridium’s business including the internet of things, voice & data, and government services have stable growth, they do not offer the upside potential of direct to device. We continue to believe Iridium’s long-term business objectives can be achieved, yet the near term is uncertain.”
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