Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Sirius XM Holdings Inc (NASDAQ:SIRI).
Is Sirius XM Holdings Inc (NASDAQ:SIRI) the right investment to pursue these days? The best stock pickers were becoming more confident. The number of bullish hedge fund positions rose by 1 lately. Sirius XM Holdings Inc (NASDAQ:SIRI) was in 27 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that SIRI 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. Now we’re going to view the fresh hedge fund action encompassing Sirius XM Holdings Inc (NASDAQ:SIRI).
Do Hedge Funds Think SIRI Is A Good Stock To Buy Now?
At the end of September, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards SIRI over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds, Berkshire Hathaway held the most valuable stake in Sirius XM Holdings Inc (NASDAQ:SIRI), which was worth $266.3 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $66.2 million worth of shares. Millennium Management, Laurion Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Neo Ivy Capital allocated the biggest weight to Sirius XM Holdings Inc (NASDAQ:SIRI), around 0.51% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, designating 0.23 percent of its 13F equity portfolio to SIRI.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Renaissance Technologies, established the most valuable position in Sirius XM Holdings Inc (NASDAQ:SIRI). Renaissance Technologies had $13.3 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $4.8 million position during the quarter. The other funds with brand new SIRI positions are Sander Gerber’s Hudson Bay Capital Management, Louis Bacon’s Moore Global Investments, and Lee Ainslie’s Maverick Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sirius XM Holdings Inc (NASDAQ:SIRI) but similarly valued. We will take a look at Kansas City Southern (NYSE:KSU), Upstart Holdings, Inc. (NASDAQ:UPST), Yum China Holdings, Inc. (NYSE:YUMC), The Hartford Financial Services Group Inc (NYSE:HIG), Hess Corporation (NYSE:HES), Devon Energy Corporation (NYSE:DVN), and ZoomInfo Technologies Inc. (NASDAQ:ZI). All of these stocks’ market caps are similar to SIRI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.7 hedge funds with bullish positions and the average amount invested in these stocks was $2180 million. That figure was $470 million in SIRI’s case. Kansas City Southern (NYSE:KSU) is the most popular stock in this table. On the other hand Upstart Holdings, Inc. (NASDAQ:UPST) is the least popular one with only 23 bullish hedge fund positions. Sirius XM Holdings Inc (NASDAQ:SIRI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SIRI is 30.8. 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 negative signal and 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 surpassed the market again by 5.1 percentage points. Unfortunately SIRI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SIRI investors were disappointed as the stock returned 1.3% 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 most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.