The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Sirius XM Holdings Inc (NASDAQ:SIRI) based on those filings.
Is Sirius XM Holdings Inc (NASDAQ:SIRI) the right pick for your portfolio? Money managers are in a bullish mood. The number of bullish hedge fund bets advanced by 5 lately. Our calculations also showed that SIRI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). SIRI was in 36 hedge funds’ portfolios at the end of March. There were 31 hedge funds in our database with SIRI holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Warren Buffett of Berkshire Hathaway
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a gander at the new hedge fund action surrounding Sirius XM Holdings Inc (NASDAQ:SIRI).
How are hedge funds trading Sirius XM Holdings Inc (NASDAQ:SIRI)?
At the end of the first quarter, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in SIRI over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the most valuable position in Sirius XM Holdings Inc (NASDAQ:SIRI), worth close to $654.1 million, amounting to 0.4% of its total 13F portfolio. On Berkshire Hathaway’s heels is Renaissance Technologies, holding a $268 million position; 0.3% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions include Ken Griffin’s Citadel Investment Group, Stuart J. Zimmer’s Zimmer Partners and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position DPM Capital allocated the biggest weight to Sirius XM Holdings Inc (NASDAQ:SIRI), around 8.46% of its 13F portfolio. Raging Capital Management is also relatively very bullish on the stock, setting aside 6.11 percent of its 13F equity portfolio to SIRI.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in Sirius XM Holdings Inc (NASDAQ:SIRI). Arrowstreet Capital had $37.3 million invested in the company at the end of the quarter. Pedro Escudero’s DPM Capital also made a $11 million investment in the stock during the quarter. The other funds with brand new SIRI positions are William C. Martin’s Raging Capital Management, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks similar to Sirius XM Holdings Inc (NASDAQ:SIRI). We will take a look at Southern Copper Corporation (NYSE:SCCO), Amphenol Corporation (NYSE:APH), Dow Inc. (NYSE:DOW), and Otis Worldwide Corporation (NYSE:OTIS). All of these stocks’ market caps are closest to SIRI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SCCO | 19 | 134406 | -1 |
| APH | 42 | 604137 | 6 |
| DOW | 38 | 375922 | 4 |
| OTIS | 4 | 13927 | 4 |
| Average | 25.75 | 282098 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $282 million. That figure was $1135 million in SIRI’s case. Amphenol Corporation (NYSE:APH) is the most popular stock in this table. On the other hand Otis Worldwide Corporation (NYSE:OTIS) is the least popular one with only 4 bullish hedge fund positions. Sirius XM Holdings Inc (NASDAQ:SIRI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on SIRI, though not to the same extent, as the stock returned 18.1% during the first two months of the second quarter and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
