Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Sirius XM Holdings Inc (NASDAQ:SIRI) based on that data.
Is Sirius XM Holdings Inc (NASDAQ:SIRI) the right investment to pursue these days? The smart money was selling. The number of long hedge fund positions dropped by 8 recently. Sirius XM Holdings Inc (NASDAQ:SIRI) was in 24 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that SIRI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the fresh hedge fund action surrounding Sirius XM Holdings Inc (NASDAQ:SIRI).
Do Hedge Funds Think SIRI Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from one quarter earlier. On the other hand, there were a total of 36 hedge funds with a bullish position in SIRI a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Berkshire Hathaway held the most valuable stake in Sirius XM Holdings Inc (NASDAQ:SIRI), which was worth $265.9 million at the end of the fourth quarter. On the second spot was Arrowstreet Capital which amassed $125.1 million worth of shares. Zimmer Partners, GLG Partners, and Millennium 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 Zimmer Partners allocated the biggest weight to Sirius XM Holdings Inc (NASDAQ:SIRI), around 0.88% of its 13F portfolio. Quantamental Technologies is also relatively very bullish on the stock, dishing out 0.74 percent of its 13F equity portfolio to SIRI.
Seeing as Sirius XM Holdings Inc (NASDAQ:SIRI) has experienced a decline in interest from the smart money, it’s safe to say that there lies a certain “tier” of money managers who were dropping their entire stakes in the first quarter. Intriguingly, Kevin Cottrell and Chris LaSusa’s KCL Capital sold off the largest position of the 750 funds tracked by Insider Monkey, totaling close to $27.1 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund dropped about $23.5 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 8 funds in the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sirius XM Holdings Inc (NASDAQ:SIRI) but similarly valued. These stocks are Seagen Inc. (NASDAQ:SGEN), Telefonica S.A. (NYSE:TEF), Yum China Holdings, Inc. (NYSE:YUMC), Laboratory Corp. of America Holdings (NYSE:LH), Occidental Petroleum Corporation (NYSE:OXY), Deutsche Bank Aktiengesellschaft (NYSE:DB), and Expedia Group Inc (NASDAQ:EXPE). This group of stocks’ market valuations are similar to SIRI’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $3182 million. That figure was $570 million in SIRI’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 6 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 25.4. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 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 5.2% since the end of March (through 7/16) 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.