Hedge Funds Have Never Been More Bullish On Sierra Wireless, Inc. (SWIR)

Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2019. In this article we are going to take a look at smart money sentiment towards Sierra Wireless, Inc. (NASDAQ:SWIR).

Sierra Wireless, Inc. (NASDAQ:SWIR) investors should be aware of an increase in hedge fund sentiment lately. Our calculations also showed that SWIR isn’t among the 30 most popular stocks among hedge funds.

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. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

D. E. Shaw

Let’s take a peek at the new hedge fund action regarding Sierra Wireless, Inc. (NASDAQ:SWIR).

How are hedge funds trading Sierra Wireless, Inc. (NASDAQ:SWIR)?

At Q1’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SWIR over the last 15 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with SWIR Positions

According to Insider Monkey’s hedge fund database, Douglas T. Granat’s Trigran Investments has the largest position in Sierra Wireless, Inc. (NASDAQ:SWIR), worth close to $30.3 million, accounting for 5.2% of its total 13F portfolio. On Trigran Investments’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $6.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish include Jim Simons’s Renaissance Technologies, Jim Roumell’s Roumell Asset Management and D. E. Shaw’s D E Shaw.

Now, key money managers were breaking ground themselves. Cove Street Capital, managed by Jeffrey Bronchick, initiated the most outsized position in Sierra Wireless, Inc. (NASDAQ:SWIR). Cove Street Capital had $0.6 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also initiated a $0.3 million position during the quarter. The other funds with brand new SWIR positions are Matthew Hulsizer’s PEAK6 Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Sierra Wireless, Inc. (NASDAQ:SWIR) but similarly valued. We will take a look at B. Riley Financial, Inc. (NASDAQ:RILY), Greenhill & Co., Inc. (NYSE:GHL), Priority Technology Holdings, Inc. (NASDAQ:PRTH), and Cytokinetics, Inc. (NASDAQ:CYTK). All of these stocks’ market caps resemble SWIR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RILY 10 84819 0
GHL 15 40189 2
PRTH 2 4360 -1
CYTK 16 69419 0
Average 10.75 49697 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $51 million in SWIR’s case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Priority Technology Holdings, Inc. (NASDAQ:PRTH) is the least popular one with only 2 bullish hedge fund positions. Sierra Wireless, Inc. (NASDAQ:SWIR) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SWIR wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SWIR were disappointed as the stock returned -3.4% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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