Sirius XM Radio Inc (NASDAQ:SIRI) investors should be aware of a decrease in hedge fund sentiment recently.
To most traders, hedge funds are assumed to be unimportant, old financial tools of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey look at the top tier of this club, around 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their top investments, we have unearthed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, bullish insider trading sentiment is another way to break down the marketplace. Obviously, there are a number of motivations for an insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this strategy if you understand what to do (learn more here).
With these “truths” under our belt, let’s take a glance at the key action regarding Sirius XM Radio Inc (NASDAQ:SIRI).
How are hedge funds trading Sirius XM Radio Inc (NASDAQ:SIRI)?
Heading into Q2, a total of 42 of the hedge funds we track held long positions in this stock, a change of -7% from the first quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings substantially.
Because Sirius XM Radio Inc (NASDAQ:SIRI) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers that decided to sell off their entire stakes in Q1. Intriguingly, James Crichton and Adam Weiss’s Scout Capital Management sold off the biggest investment of the “upper crust” of funds we key on, worth about $86.7 million in stock.. Robert Boucai’s fund, Newbrook Capital Advisors, also cut its stock, about $33.7 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 3 funds in Q1.
How are insiders trading Sirius XM Radio Inc (NASDAQ:SIRI)?
Insider buying is most useful when the company in question has seen transactions within the past 180 days. Over the last 180-day time frame, Sirius XM Radio Inc (NASDAQ:SIRI) has seen 2 unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Sirius XM Radio Inc (NASDAQ:SIRI). These stocks are Entercom Communications Corp. (NYSE:ETM), Cumulus Media Inc (NASDAQ:CMLS), and Pandora Media Inc (NYSE:P). All of these stocks are in the broadcasting – radio industry and their market caps match SIRI’s market cap.
