Are Hedge Funds Losing Interest In Golar LNG Limited (USA) (GLNG)?

We can judge whether Golar LNG Limited (USA) (NASDAQ:GLNG) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.

Is Golar LNG Limited (USA) (NASDAQ:GLNG) a bargain? The smart money is reducing their bets on the stock. The number of long hedge fund positions fell by 5 in recent months. 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 The Wendy’s Company (NASDAQ:WEN), Avolon Holdings Ltd (NYSE:AVOL), and UMB Financial Corporation (NASDAQ:UMBF) to gather more data points.

If you’d ask most market participants, hedge funds are perceived as worthless, outdated investment vehicles of the past. While there are greater than an 8000 funds in operation at present, Our experts choose to focus on the masters of this group, approximately 700 funds. These money managers manage the majority of the hedge fund industry’s total capital, and by watching their matchless picks, Insider Monkey has deciphered a number of investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, we’re going to go over the latest action regarding Golar LNG Limited (USA) (NASDAQ:GLNG).

What does the smart money think about Golar LNG Limited (USA) (NASDAQ:GLNG)?

Heading into Q4, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the second quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, BHR Capital, managed by Michael Thompson, holds the largest position in Golar LNG Limited (USA) (NASDAQ:GLNG). BHR Capital has a $80.9 million position in the stock, comprising 11.8% of its 13F portfolio. The second largest stake is held by Ascend Capital, led by Malcolm Fairbairn, holding a $72.9 million position; 2.9% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions contain Glenn Russell Dubin’s Highbridge Capital Management, John A. Levin’s Levin Capital Strategies and Dmitry Balyasny’s Balyasny Asset Management.

Due to the fact that Golar LNG Limited (USA) (NASDAQ:GLNG) has faced declining sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their full holdings in the third quarter. Interestingly, Don Morgan’s Brigade Capital cut the biggest position of all the hedgies monitored by Insider Monkey, totaling close to $15.6 million in stock. Carson Yost’s fund, Yost Capital Management, also cut its stock, about $12.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Golar LNG Limited (USA) (NASDAQ:GLNG). We will take a look at The Wendy’s Company (NASDAQ:WEN), Avolon Holdings Ltd (NYSE:AVOL), UMB Financial Corporation (NASDAQ:UMBF), and PIMCO Dynamic Credit Income Fund (NYSE:PCI). All of these stocks’ market caps are similar to GLNG’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $235 million, versus $682 million in GLNG’s case. The Wendy’s Company (NASDAQ:WEN) is the most popular stock in this table, while PIMCO Dynamic Credit Income Fund (NYSE:PCI) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Golar LNG Limited (USA) (NASDAQ:GLNG) is ,much more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.