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 Sirius XM Holdings Inc (NASDAQ:SIRI) changed recently.
Sirius XM Holdings Inc (NASDAQ:SIRI) was in 26 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 42. SIRI has seen an increase in hedge fund sentiment recently. There were 24 hedge funds in our database with SIRI holdings at the end of March. Our calculations also showed that SIRI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Keith Meister of Corvex Capital
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Do Hedge Funds Think SIRI Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from one quarter earlier. By comparison, 42 hedge funds held shares or bullish call options in SIRI a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the largest position in Sirius XM Holdings Inc (NASDAQ:SIRI). Berkshire Hathaway has a $285.5 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $114.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Israel Englander’s Millennium Management, Stuart J. Zimmer’s Zimmer Partners and Keith Meister’s Corvex Capital. In terms of the portfolio weights assigned to each position Corvex Capital allocated the biggest weight to Sirius XM Holdings Inc (NASDAQ:SIRI), around 1.02% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.5 percent of its 13F equity portfolio to SIRI.
As aggregate interest increased, key hedge funds have been driving this bullishness. Corvex Capital, managed by Keith Meister, established the biggest call position in Sirius XM Holdings Inc (NASDAQ:SIRI). Corvex Capital had $30.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $26.8 million position during the quarter. The following funds were also among the new SIRI investors: Phill Gross and Robert Atchinson’s Adage Capital Management, Donald Sussman’s Paloma Partners, and Sander Gerber’s Hudson Bay Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Sirius XM Holdings Inc (NASDAQ:SIRI). These stocks are Genmab A/S (NASDAQ:GMAB), Ball Corporation (NYSE:BLL), West Pharmaceutical Services Inc. (NYSE:WST), RingCentral Inc (NYSE:RNG), Carnival Corporation & plc (NYSE:CUK), Futu Holdings Limited (NASDAQ:FUTU), and Tencent Music Entertainment Group (NYSE:TME). This group of stocks’ market values are closest to SIRI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GMAB | 9 | 116722 | -4 |
| BLL | 44 | 1570958 | 6 |
| WST | 31 | 562904 | 5 |
| RNG | 47 | 3285023 | -4 |
| CUK | 10 | 236979 | 6 |
| FUTU | 31 | 1190137 | 5 |
| TME | 35 | 570093 | -28 |
| Average | 29.6 | 1076117 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.6 hedge funds with bullish positions and the average amount invested in these stocks was $1076 million. That figure was $578 million in SIRI’s case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand Genmab A/S (NASDAQ:GMAB) is the least popular one with only 9 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 47.9. 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. 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 24.9% in 2021 through October 15th and surpassed the market again by 4.5 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 -7.7% since the end of June (through 10/15) 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.
