Is Sirius XM Holdings Inc (SIRI) A Good Stock To Buy Right Now?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Sirius XM Holdings Inc (NASDAQ:SIRI).

Sirius XM Holdings Inc (NASDAQ:SIRI) investors should pay attention to an increase in hedge fund interest of late. SIRI was in 27 hedge funds’ portfolios at the end of the third quarter of 2016. There were 22 hedge funds in our database with SIRI holdings at the end of the previous quarter. At the end of this article we will also compare SIRI to other stocks including The Progressive Corporation (NYSE:PGR), Franklin Resources, Inc. (NYSE:BEN), and Brown-Forman Corporation (NYSE:BF) to get a better sense of its popularity.

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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.



Now, let’s review the latest action encompassing Sirius XM Holdings Inc (NASDAQ:SIRI).

How are hedge funds trading Sirius XM Holdings Inc (NASDAQ:SIRI)?

Heading into the fourth quarter of 2016, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a jump of 23% from the second quarter of 2016. However, SIRI used to be more popular a year ago as you can see from the graph below. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Brahman Capital, managed by Peter Adam Hochfelder, holds the most valuable position in Sirius XM Holdings Inc (NASDAQ:SIRI). According to its latest 13F filing, the fund has a $291.2 million position in the stock, comprising 10.2% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $212.8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism include David Cohen and Harold Levy’s Iridian Asset Management, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Now, some big names have jumped into Sirius XM Holdings Inc (NASDAQ:SIRI) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the most outsized position in Sirius XM Holdings Inc (NASDAQ:SIRI). According to its latest 13F filing, the fund had $18.9 million invested in the company at the end of the quarter. Lee Hicks and Jan Koerner’s Park Presidio Capital also made a $16.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, James Dondero’s Highland Capital Management, and Joel Greenblatt’s Gotham Asset Management.

Let’s go over 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 The Progressive Corporation (NYSE:PGR), Franklin Resources, Inc. (NYSE:BEN), Brown-Forman Corporation (NYSE:BF), and Canadian Pacific Railway Limited (USA) (NYSE:CP). This group of stocks’ market values are similar to SIRI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PGR 29 914281 -1
BEN 32 1957076 0
BF 21 614747 -3
CP 32 2233116 1

As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $1.43 billion. That figure was $894 million in SIRI’s case. Franklin Resources, Inc. (NYSE:BEN) is the most popular stock in this table. On the other hand Brown-Forman Corporation (NYSE:BF) is the least popular one with only 21 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BEN might be a better candidate to consider a long position.

Disclosure: none.