A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Iridium Communications Inc. (NASDAQ:IRDM).
Iridium Communications Inc. (NASDAQ:IRDM) was in 24 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. IRDM investors should pay attention to an increase in enthusiasm from smart money of late. There were 18 hedge funds in our database with IRDM positions at the end of the second quarter. Our calculations also showed that IRDM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Mario Gabelli of GAMCO Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to analyze the new hedge fund action surrounding Iridium Communications Inc. (NASDAQ:IRDM).
Do Hedge Funds Think IRDM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in IRDM a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Iridium Communications Inc. (NASDAQ:IRDM) was held by ARK Investment Management, which reported holding $477.1 million worth of stock at the end of September. It was followed by Silver Heights Capital Management with a $95.2 million position. Other investors bullish on the company included Select Equity Group, D E Shaw, and GAMCO Investors. In terms of the portfolio weights assigned to each position Silver Heights Capital Management allocated the biggest weight to Iridium Communications Inc. (NASDAQ:IRDM), around 34.7% of its 13F portfolio. ARK Investment Management is also relatively very bullish on the stock, designating 1.15 percent of its 13F equity portfolio to IRDM.
Consequently, key money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, established the most outsized position in Iridium Communications Inc. (NASDAQ:IRDM). Citadel Investment Group had $4.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $3.5 million position during the quarter. The other funds with brand new IRDM positions are Renaissance Technologies, Paul Tudor Jones’s Tudor Investment Corp, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Iridium Communications Inc. (NASDAQ:IRDM) but similarly valued. These stocks are Redfin Corporation (NASDAQ:RDFN), Alight Inc. (NYSE:ALIT), Compass Inc. (NYSE:COMP), South State Corporation (NASDAQ:SSB), IDACORP Inc (NYSE:IDA), National Instruments Corporation (NASDAQ:NATI), and Stantec Inc. (NYSE:STN). This group of stocks’ market values are closest to IRDM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RDFN | 12 | 551336 | -5 |
| ALIT | 42 | 1278015 | 42 |
| COMP | 25 | 708383 | 2 |
| SSB | 20 | 282835 | 2 |
| IDA | 12 | 81266 | -3 |
| NATI | 24 | 249677 | 3 |
| STN | 9 | 75656 | -1 |
| Average | 20.6 | 461024 | 5.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.6 hedge funds with bullish positions and the average amount invested in these stocks was $461 million. That figure was $685 million in IRDM’s case. Alight Inc. (NYSE:ALIT) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 9 bullish hedge fund positions. Iridium Communications Inc. (NASDAQ:IRDM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IRDM is 62.7. 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 positive signal but 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately IRDM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IRDM were disappointed as the stock returned 1.3% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.
Follow Iridium Communications Inc. (NASDAQ:IRDM)
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Disclosure: None. This article was originally published at Insider Monkey.
