Iridium Communications (IRDM) Faced Setback After Qualcomm Cancelled Partnership

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” first quarter 2024 investor letter. A copy of the same can be downloaded here. Early gains in large caps and tech leaders expanded to include other sectors and smaller companies, especially later in the quarter. Large companies outperformed small ones, gaining 10.3% and 5.2%, respectively. In the first quarter, the fund returned 2.25% (net) lagging behind the benchmark, the Russell 2500 Growth Index’s 8.51% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Meridian Growth Fund highlighted stocks like Iridium Communications Inc. (NASDAQ:IRDM) in the first quarter 2024 investor letter. Iridium Communications Inc. (NASDAQ:IRDM) offers mobile voice and data communications services and products. Iridium Communications Inc.’s (NASDAQ:IRDM) one-month return was -16.04%, and its shares lost 58.42% of their value over the last 52 weeks. On June 25, 2024, Iridium Communications Inc. (NASDAQ:IRDM) stock closed at $25.29 per share with a market capitalization of $3.071 billion.

Meridian Growth Fund stated the following regarding Iridium Communications Inc. (NASDAQ:IRDM) in its first quarter 2024 investor letter:

"Iridium Communications Inc. (NASDAQ:IRDM) is a global satellite communications company that provides mobile voice and data communications services to businesses, governments, non-governmental organizations, and consumers worldwide. We invested in Iridium following the build-out of its next-generation satellite constellation, which was completed in 2018. With significant capital investment behind it, the company is poised to return capital to shareholders via meaningful share buybacks funded by strong and predictable free cash flow. We are also excited by the company’s efforts to monetize its network through expanded use cases for its global coverage, including applications for marine operators and consumer devices such as global Wi-Fi hot spots and Garmin devices. Unfortunately, the company’s plans were delayed when Qualcomm, Iridium’s partner in the mobile phone market, canceled their partnership after failing to generate enough demand from smartphone manufacturers. We maintained our position in the company during the quarter."

A technician inspecting a satellite dish, highlighting the Mobile Voice and Data Services scope.

Iridium Communications Inc. (NASDAQ:IRDM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Iridium Communications Inc. (NASDAQ:IRDM) at the end of the first quarter which was 33 in the previous quarter. While we acknowledge the potential of Iridium Communications Inc. (NASDAQ:IRDM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Iridium Communications Inc. (NASDAQ:IRDM) in another article and shared Baron Partners Fund's views on the company. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.