In this article we will analyze whether Echostar Corporation (NASDAQ:SATS) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Echostar Corporation (NASDAQ:SATS) was in 26 hedge funds’ portfolios at the end of June. The all time high for this statistic is 34. SATS has experienced a decrease in hedge fund sentiment of late. There were 28 hedge funds in our database with SATS positions at the end of the first quarter. Our calculations also showed that SATS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
David Einhorn of Greenlight Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a glance at the latest hedge fund action encompassing Echostar Corporation (NASDAQ:SATS).
Do Hedge Funds Think SATS Is A Good Stock To Buy Now?
At Q2’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SATS over the last 24 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the biggest position in Echostar Corporation (NASDAQ:SATS). Renaissance Technologies has a $62.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Mark G. Schoeppner of Quaker Capital Investments, with a $32.1 million position; 12.7% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions include David Einhorn’s Greenlight Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Quaker Capital Investments allocated the biggest weight to Echostar Corporation (NASDAQ:SATS), around 12.72% of its 13F portfolio. Ivy Lane Capital is also relatively very bullish on the stock, dishing out 3.44 percent of its 13F equity portfolio to SATS.
Seeing as Echostar Corporation (NASDAQ:SATS) has faced falling interest from the smart money, it’s easy to see that there was a specific group of funds that decided to sell off their full holdings in the second quarter. At the top of the heap, Marc Majzner’s Clearline Capital sold off the biggest investment of the 750 funds watched by Insider Monkey, valued at about $9.6 million in stock, and Peter S. Park’s Park West Asset Management was right behind this move, as the fund sold off about $4.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds in the second quarter.
Let’s also examine hedge fund activity in other stocks similar to Echostar Corporation (NASDAQ:SATS). We will take a look at KAR Auction Services Inc (NYSE:KAR), Victory Capital Holdings, Inc. (NASDAQ:VCTR), Seres Therapeutics Inc (NASDAQ:MCRB), Ligand Pharmaceuticals Inc. (NASDAQ:LGND), Kymera Therapeutics, Inc. (NASDAQ:KYMR), TechTarget Inc (NASDAQ:TTGT), and Global Blood Therapeutics Inc (NASDAQ:GBT). All of these stocks’ market caps resemble SATS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KAR | 23 | 284975 | 1 |
| VCTR | 14 | 83647 | 0 |
| MCRB | 16 | 271391 | -3 |
| LGND | 7 | 55674 | -6 |
| KYMR | 21 | 448831 | 5 |
| TTGT | 14 | 118269 | -3 |
| GBT | 16 | 456028 | -3 |
| Average | 15.9 | 245545 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $246 million. That figure was $247 million in SATS’s case. KAR Auction Services Inc (NYSE:KAR) is the most popular stock in this table. On the other hand Ligand Pharmaceuticals Inc. (NASDAQ:LGND) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Echostar Corporation (NASDAQ:SATS) is more popular among hedge funds. Our overall hedge fund sentiment score for SATS is 75.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 24.9% in 2021 through October 15th but still managed to beat the market by 4.5 percentage points. Hedge funds were also right about betting on SATS as the stock returned 4.7% since the end of June (through 10/15) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Echostar Corp (NASDAQ:SATS)
Follow Echostar Corp (NASDAQ:SATS)
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Disclosure: None. This article was originally published at Insider Monkey.
