Sirius XM Radio Inc (SIRI): Are Hedge Funds Right About This Stock?

As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish thesis and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Sirius XM Radio Inc (NASDAQ:SIRI) in this article.

Sirius XM Radio Inc (NASDAQ:SIRI) has experienced an increase in hedge fund sentiment recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as KKR & Co. L.P. (NYSE:KKR), Mylan Inc. (NASDAQ:MYL), and Ross Stores, Inc. (NASDAQ:ROST) to gather more data points.

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If you’d ask most stock holders, hedge funds are viewed as unimportant, outdated investment vehicles of the past. While there are greater than an 8000 funds trading today, Our researchers hone in on the upper echelon of this group, approximately 700 funds. It is estimated that this group of investors preside over bulk of all hedge funds’ total capital, and by following their unrivaled picks, Insider Monkey has revealed various investment strategies that have historically defeated the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, we’re going to take a peek at the new action encompassing Sirius XM Radio Inc (NASDAQ:SIRI).

How have hedgies been trading Sirius XM Radio Inc (NASDAQ:SIRI)?

Heading into Q4, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the second quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Brahman Capital, managed by Peter Adam Hochfelder, holds the most valuable position in Sirius XM Radio Inc (NASDAQ:SIRI). Brahman Capital has a $356.1 million position in the stock, comprising 7% of its 13F portfolio. The second largest stake is held by David Cohen and Harold Levy of Iridian Asset Management, with a $289.6 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism encompass John Griffin’s Blue Ridge Capital, Leon Cooperman’s Omega Advisors and Jacob Doft’s Highline Capital Management.

Now, some big names have jumped into Sirius XM Radio Inc (NASDAQ:SIRI) headfirst. Glenview Capital, managed by Larry Robbins, created the most outsized position in Sirius XM Radio Inc (NASDAQ:SIRI). Glenview Capital had $55.3 million invested in the company at the end of the quarter. Steven Owsley’s Madison Street Partners also initiated a $2.6 million position during the quarter. The other funds with brand new SIRI positions are Paul Tudor Jones’s Tudor Investment Corp, Cliff Asness’s AQR Capital Management, and Jay Petschek and Steven Major’s Corsair Capital Management.

Let’s check out hedge fund activity in other stocks similar to Sirius XM Radio Inc (NASDAQ:SIRI). We will take a look at KKR & Co. L.P. (NYSE:KKR), Mylan Inc. (NASDAQ:MYL), Ross Stores, Inc. (NASDAQ:ROST), and CRH PLC (ADR) (NYSE:CRH). 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
KKR 30 581377 0
MYL 74 2843316 -18
ROST 40 908863 5
CRH 7 12060 4

As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $1086 million. That figure was $1398 million in SIRI’s case. Mylan Inc. (NASDAQ:MYL) is the most popular stock in this table, while hte least popular one is CRH PLC (ADR) (NYSE:CRH). Even though, Sirius XM Radio Inc (NASDAQ:SIRI) with 35 bullish hedge fund positions is not the least popular stock in this group, it has not caught much attention from hedge funds. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are collectively most bullish on. For that kind of alternative you may want to consider MYL.