The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Echostar Corporation (NASDAQ:SATS) for your portfolio? We'll answer that question by comparing SATS' hedge fund sentiment against peers like Schneider National, Inc. (NYSE:SNDR), Adaptive Biotechnologies Corporation (NASDAQ:ADPT), Switch, Inc. (NYSE:SWCH), and Mantech International Corp (NASDAQ:MANT).
Echostar Corporation (NASDAQ:SATS) investors should be aware of an increase in enthusiasm from smart money recently. Our calculations also showed that SATS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_364880" align="aligncenter" width="499"] Nathaniel August of Mangrove Partners[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to review the new hedge fund action surrounding Echostar Corporation (NASDAQ:SATS).
Hedge fund activity in Echostar Corporation (NASDAQ:SATS)
At Q3's end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SATS over the last 17 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Echostar Corporation (NASDAQ:SATS), which was worth $159.3 million at the end of the third quarter. On the second spot was Hound Partners which amassed $112.4 million worth of shares. Mangrove Partners, Fir Tree, and Park West Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Red Cedar Management allocated the biggest weight to Echostar Corporation (NASDAQ:SATS), around 10.04% of its portfolio. Mangrove Partners is also relatively very bullish on the stock, setting aside 7.32 percent of its 13F equity portfolio to SATS.
Consequently, key hedge funds were breaking ground themselves. Hound Partners, managed by Jonathan Auerbach, established the most valuable position in Echostar Corporation (NASDAQ:SATS). Hound Partners had $112.4 million invested in the company at the end of the quarter. David Rosen's Rubric Capital Management also made a $21.2 million investment in the stock during the quarter. The following funds were also among the new SATS investors: Sander Gerber's Hudson Bay Capital Management, David Harding's Winton Capital Management, and Steve Cohen's Point72 Asset Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Echostar Corporation (NASDAQ:SATS) but similarly valued. We will take a look at Schneider National, Inc. (NYSE:SNDR), Adaptive Biotechnologies Corporation (NASDAQ:ADPT), Switch, Inc. (NYSE:SWCH), and Mantech International Corp (NASDAQ:MANT). This group of stocks' market values resemble SATS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SNDR,17,127932,-4 ADPT,21,2018148,-17 SWCH,14,322417,1 MANT,14,17786,3 Average,16.5,621571,-4.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $622 million. That figure was $602 million in SATS's case. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is the most popular stock in this table. On the other hand Switch, Inc. (NYSE:SWCH) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Echostar Corporation (NASDAQ:SATS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on SATS, though not to the same extent, as the stock returned 6.2% during the fourth quarter (through the end of November) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.