Here Is What Hedge Funds Think About Iridium Communications Inc. (IRDM)

Is Iridium Communications Inc. (NASDAQ:IRDM) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Iridium Communications Inc. (NASDAQ:IRDM) has seen a slight increase in activity from the world’s largest hedge funds of late. Iridium Communications Inc. (NASDAQ:IRDM) was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. There were 11 hedge funds in our database with Iridium Communications Inc. (NASDAQ:IRDM) holdings at the end of the previous quarter. 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 Ashford Hospitality Trust, Inc. (NYSE:AHT), General Cable Corporation (NYSE:BGC), and Viad Corp (NYSE:VVI) to gather more data points.

In the financial world, there are numerous signals shareholders put to use to analyze their stock investments. A duo of the most under-the-radar signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite fund managers can beat the market by a healthy amount (see the details here).

With all of this in mind, let’s take a look at the recent action regarding Iridium Communications Inc. (NASDAQ:IRDM).

Hedge fund activity in Iridium Communications Inc. (NASDAQ:IRDM)

At the end of Q3, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 9% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Iridium Communications Inc. (NASDAQ:IRDM). Royce & Associates has a $13.9 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Dorset Management, led by David M. Knott, holding a $2.1 million position; 0.6% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism encompass Charles Paquelet’s Skylands Capital, Renaissance Technologies and Mario Gabelli’s GAMCO Investors.

As one would reasonably expect, key hedge funds have been driving this bullishness. Renaissance Technologies created the largest position in Iridium Communications Inc. (NASDAQ:IRDM). Renaissance Technologies had $1.1 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $0.2 million investment in the stock during the quarter. The other funds with brand new IRDM positions are Paul Tudor Jones’ Tudor Investment Corp, Dmitry Balyasny’s Balyasny Asset Management, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Iridium Communications Inc. (NASDAQ:IRDM) but similarly valued. These stocks are Ashford Hospitality Trust, Inc. (NYSE:AHT), General Cable Corporation (NYSE:BGC), Viad Corp (NYSE:VVI), and ConnectOne Bancorp Inc (NASDAQ:CNOB). This group of stock market values resembles IRDM’s market value.

As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $66 million, versus $21 million in Iridium Communications Inc. (NASDAQ:IRDM)’s case. Ashford Hospitality Trust, Inc. (NYSE:AHT) is the most popular stock in this table, while ConnectOne Bancorp Inc (NASDAQ:CNOB) is the least popular one with only nine funds holding shares. Iridium Communications Inc. (NASDAQ:IRDM) is not the least popular stock in this group, but hedge fund interest is below average. This does not necessarily suggest that the stock does not represent a good investment, but we prefer to follow stocks that hedge funds are the most bullish on. In this regard, Ashford Hospitality Trust, Inc. (NYSE:AHT) might be a better candidate to consider a long position.