Echostar Corporation (SATS) Fell Out Of Favor With Hedge Funds

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Echostar Corporation (NASDAQ:SATS) changed recently.

Echostar Corporation (NASDAQ:SATS) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic is 34. SATS investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 26 hedge funds in our database with SATS positions at the end of the second quarter. Our calculations also showed that SATS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s take a glance at the recent hedge fund action regarding Echostar Corporation (NASDAQ:SATS).

Do Hedge Funds Think SATS Is A Good Stock To Buy Now?

At third quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in SATS over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the largest position in Echostar Corporation (NASDAQ:SATS). Renaissance Technologies has a $56.2 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 $36.7 million position; 15.8% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Einhorn’s Greenlight Capital and Mark Coe’s Intrinsic Edge Capital. In terms of the portfolio weights assigned to each position Quaker Capital Investments allocated the biggest weight to Echostar Corporation (NASDAQ:SATS), around 15.76% of its 13F portfolio. Ivy Lane Capital is also relatively very bullish on the stock, designating 3.67 percent of its 13F equity portfolio to SATS.

Since Echostar Corporation (NASDAQ:SATS) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few hedgies who were dropping their entire stakes by the end of the third quarter. At the top of the heap, Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) sold off the largest investment of the 750 funds monitored by Insider Monkey, valued at an estimated $2.4 million in stock. Andrew Kurita’s fund, Kettle Hill Capital Management, also cut its stock, about $2.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks similar to Echostar Corporation (NASDAQ:SATS). We will take a look at Noah Holdings Limited (NYSE:NOAH), Bandwidth Inc. (NASDAQ:BAND), First Merchants Corporation (NASDAQ:FRME), American Assets Trust, Inc (NYSE:AAT), StepStone Group Inc. (NASDAQ:STEP), TowneBank (NASDAQ:TOWN), and Medifast, Inc. (NYSE:MED). All of these stocks’ market caps are similar to SATS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $179 million. That figure was $242 million in SATS’s case. Bandwidth Inc. (NASDAQ:BAND) is the most popular stock in this table. On the other hand American Assets Trust, Inc (NYSE:AAT) is the least popular one with only 8 bullish hedge fund positions. Echostar Corporation (NASDAQ:SATS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SATS is 73.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately SATS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SATS were disappointed as the stock returned 4% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.