Cheniere Energy, Inc. (NYSEMKT:LNG) is up by 1.95% this afternoon after analysts at Citigroup reiterated their ‘Buy’ rating on the stock and maintained their $47 price target on it. The analysts believe that new CEO Jack Fusco will lay out a plan as to exactly when the company will become profitable and when Cheniere Energy will begin sharing its cash flow to shareholders. The analysts also think the company’s marketing entity existing contracts through 2018 provide the market with some potential visibility as to Cheniere’s intermediate-term cash flows. Cheniere Energy, Inc. (NYSEMKT:LNG) shares have been a victim of the LNG downturn and the company needs to prove to the market that exporting gas from the U.S will be profitable in the long run.
At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Cheniere Energy, Inc. (NYSEMKT:LNG) investors should be aware of a decrease in hedge fund interest recently. At the end of the first quarter, a total of 49 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 9% drop from the end of the fourth quarter of 2015. 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 Sabre Corp (NASDAQ:SABR), Waste Connections, Inc. (NYSE:WCN), and ANSYS, Inc. (NASDAQ:ANSS) to gather more data points.
Follow Cheniere Energy Inc. (NYSEMKT:LNG)
Follow Cheniere Energy Inc. (NYSEMKT:LNG)
Of the funds tracked by Insider Monkey, Carl Icahn’s Icahn Capital LP has the most valuable position in Cheniere Energy, Inc. (NYSEMKT:LNG), worth close to $1.11 billion, comprising 5.1% of its total 13F portfolio. The second largest stake is held by Baupost Group, led by Seth Klarman, holding a $1.01 billion position; 14.6% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism comprise Stephen Mandel’s Lone Pine Capital, Michael Lowenstein’s Kensico Capital, and David Gallo’s Valinor Management LLC.
On the next page we’ll look at some funds that sold off positions in Cheniere during Q1, as well as compare the stock to a handful of others with similar market caps.
Since Cheniere Energy, Inc. (NYSEMKT:LNG) has experienced a declination in interest from the smart money, it’s easy to see that there exists a select few hedgies that elected to cut their full holdings in the first quarter. It’s worth mentioning that Jason Karp’s Tourbillon Capital Partners sold off the biggest stake of all the hedgies tracked by Insider Monkey, valued at about $77 million in call options. Jeffrey Bersh and Michael Wartell’s fund, Venor Capital Management, also dropped its call options, about $67.6 million worth. These moves are important to note, as total hedge fund interest was cut by 5 funds in the fourth quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Cheniere Energy, Inc. (NYSEMKT:LNG) but similarly valued. These stocks are Sabre Corp (NASDAQ:SABR), Waste Connections, Inc. (NYSE:WCN), ANSYS, Inc. (NASDAQ:ANSS), and NetApp Inc. (NASDAQ:NTAP). This group of stocks’ market caps are similar to LNG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SABR | 38 | 2275055 | 0 |
| WCN | 26 | 347327 | 7 |
| ANSS | 22 | 499901 | 5 |
| NTAP | 24 | 187829 | 2 |
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $828 million. That figure was $4.48 billion in LNG’s case. Sabre Corp (NASDAQ:SABR) is the most popular stock in this table. On the other hand ANSYS, Inc. (NASDAQ:ANSS) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Cheniere Energy, Inc. (NYSEMKT:LNG) is 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.
Disclosure: None
