Intelsat S.A. (I): Hedge Funds Rushing To The Exits

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Intelsat S.A. (NYSE:I)?

Intelsat S.A. (NYSE:I) shareholders have witnessed a decrease in enthusiasm from smart money lately. I was in 23 hedge funds’ portfolios at the end of the first quarter of 2020. There were 49 hedge funds in our database with I positions at the end of the previous quarter. Our calculations also showed that I 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).

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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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.

Appaloosa Management Lp

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 we’re going to analyze the fresh hedge fund action regarding Intelsat S.A. (NYSE:I).

How have hedgies been trading Intelsat S.A. (NYSE:I)?

At Q1’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -53% from the fourth quarter of 2019. On the other hand, there were a total of 54 hedge funds with a bullish position in I a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

Is I A Good Stock To Buy?

More specifically, Appaloosa Management LP was the largest shareholder of Intelsat S.A. (NYSE:I), with a stake worth $15.5 million reported as of the end of September. Trailing Appaloosa Management LP was Discovery Capital Management, which amassed a stake valued at $11.9 million. Silver Lake Partners, Cyrus Capital Partners, and Key Square Capital Management 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 Cyrus Capital Partners allocated the biggest weight to Intelsat S.A. (NYSE:I), around 3.5% of its 13F portfolio. Discovery Capital Management is also relatively very bullish on the stock, designating 3.28 percent of its 13F equity portfolio to I.

Because Intelsat S.A. (NYSE:I) has experienced falling interest from hedge fund managers, it’s easy to see that there were a few hedgies that slashed their positions entirely by the end of the first quarter. It’s worth mentioning that Zach Schreiber’s Point State Capital cut the largest investment of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $56.8 million in stock. Zach Schreiber’s fund, Point State Capital, also dropped its stock, about $23.5 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 26 funds by the end of the first quarter.

Let’s check out hedge fund activity in other stocks similar to Intelsat S.A. (NYSE:I). We will take a look at CURO Group Holdings Corp. (NYSE:CURO), Ideanomics, Inc. (NASDAQ:IDEX), Sterling Bancorp, Inc. (NASDAQ:SBT), and Franklin Covey Co. (NYSE:FC). This group of stocks’ market values are closest to I’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CURO 14 24996 -4
IDEX 3 761 1
SBT 9 2757 -3
FC 13 15115 2
Average 9.75 10907 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $73 million in I’s case. CURO Group Holdings Corp. (NYSE:CURO) is the most popular stock in this table. On the other hand Ideanomics, Inc. (NASDAQ:IDEX) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Intelsat S.A. (NYSE:I) is more popular among hedge funds. 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 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. Unfortunately I wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on I were disappointed as the stock returned -44.5% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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