Hedge Funds Are Selling Echostar Corporation (SATS)

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Echostar Corporation (NASDAQ:SATS).

Echostar Corporation (NASDAQ:SATS) has seen a decrease in hedge fund sentiment lately. 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 Reliance Steel & Aluminum (NYSE:RS), Tesoro Logistics LP (NYSE:TLLP), and Copart, Inc. (NASDAQ:CPRT) to gather more data points.

In the financial world, there are tons of gauges stock traders use to value stocks. A duo of the less known gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass the S&P 500 by a healthy amount (see the details here).

Now, let’s check out the fresh action surrounding Echostar Corporation (NASDAQ:SATS).

What have hedge funds been doing with Echostar Corporation (NASDAQ:SATS)?

Heading into Q4, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a trim of 3% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Echostar Corporation (NASDAQ:SATS). According to its latest quarterly report, the fund has an $83.3 million position in the stock, comprising 0.2% of its 13F portfolio. On Renaissance Technologies’s heels is Kensico Capital, led by Michael Lowenstein, holding a $74.6 million position; 1.6% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish contain Murray Stahl’s Horizon Asset Management, Adam Fox and Samuel Elder’s Altalis Capital Partners and Mario Gabelli’s GAMCO Investors.

Because Echostar Corporation (NASDAQ:SATS) has experienced falling interest from hedge fund managers, it’s easy to see that there is a sect of fund managers who were dropping their full holdings last quarter. Interestingly, Millennium Management Subsidiary’s Blue Arrow Capital Management sold off the largest investment of all the hedgies followed by Insider Monkey, worth an estimated $8.5 million in stock, and Ray Carroll’s Breton Hill Capital was right behind this move, as the fund said goodbye to about $1.7 million worth of shares. These moves are interesting, as aggregate hedge fund interest was cut by 1 fund last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Echostar Corporation (NASDAQ:SATS) but similarly valued. These stocks are Reliance Steel & Aluminum (NYSE:RS), Tesoro Logistics LP (NYSE:TLLP), Copart, Inc. (NASDAQ:CPRT), and Ryder System, Inc. (NYSE:R). This group of stocks’ market valuations are closest to SATS’s market valuation.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $367 million. That figure was $369 million in SATS’s case. Copart, Inc. (NASDAQ:CPRT) is leading the pack, while Tesoro Logistics LP (NYSE:TLLP) is at the other end of the specter with only 9 bullish hedge fund positions. Echostar Corporation (NASDAQ:SATS) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CPRT might be a better candidate to consider a long position.