Is Liberty Global Inc. (NASDAQ:LBTYA) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2-and-20 compensation structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs manning their offices. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments, making their opinions on stocks like Liberty Global invaluable. With that in mind, let’s see what they think of the stock.
Liberty Global Inc. (NASDAQ:LBTYA) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. LBTYA was in 64 hedge funds’ portfolio at the end of September. There were 70 hedge funds in our database with LBTYA holdings at the end of the previous quarter. At the end of this article we will also compare LBTYA to other stocks including The Blackstone Group L.P. (NYSE:BX), Automatic Data Processing (NASDAQ:ADP), and American Tower Corp (NYSE:AMT) to get a better sense of its popularity.
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In the eyes of most traders, hedge funds are viewed as unimportant, outdated investment vehicles of yesteryear. While there are over 8,000 funds in operation at the moment, experts at Insider Monkey, a website specializing in hedge funds, hone in on the top tier of this group, approximately 700 funds. It is estimated that this group of investors shepherd most of the hedge fund industry’s total asset base, and by observing their first-class investments, Insider Monkey has determined numerous investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in its back tests.
Now, we’re going to analyze the recent action encompassing Liberty Global Inc. (NASDAQ:LBTYA).
What does the smart money think about Liberty Global Inc. (NASDAQ:LBTYA)?
At Q3’s end, a total of 64 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 9% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.
Of the funds tracked by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the number one position in Liberty Global Inc. (NASDAQ:LBTYA). Berkshire Hathaway has a $513.4 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting in the second spot is Coatue Management, led by Philippe Laffont, holding a $185.9 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism contain Peter Adam Hochfelder’s Brahman Capital, Larry Robbins’ Glenview Capital, and David E. Shaw’s D E Shaw.
Due to the fact that Liberty Global Inc. (NASDAQ:LBTYA) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that unloaded their positions last quarter. Intriguingly, Eashwar Krishnan’s Tybourne Capital Management said goodbye to the biggest investment of all the hedgies followed by Insider Monkey, comprising close to $136.8 million in stock, while Richard Chilton of Chilton Investment Company was right behind this move, as the money manager dumped about $65.7 million worth of shares. These moves are intriguing to say the least, as total hedge fund interest fell by six funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Liberty Global Inc. (NASDAQ:LBTYA). These stocks are The Blackstone Group L.P. (NYSE:BX), Automatic Data Processing (NASDAQ:ADP), American Tower Corp (NYSE:AMT), and Deutsche Bank AG (USA) (NYSE:DB). This group of stocks’ market values match LBTYA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BX | 34 | 406116 | 0 |
| ADP | 32 | 957220 | -10 |
| AMT | 42 | 2352373 | 3 |
| DB | 8 | 132760 | -4 |
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $962 million. American Tower Corp (NYSE:AMT) is the most popular stock in this table. On the other hand Deutsche Bank AG (USA) (NYSE:DB) is the least popular one with only eight bullish hedge fund positions. Compared to these stocks Liberty Global Inc. (NASDAQ:LBTYA) is far more popular among hedge funds. Considering that hedge funds are fond of this stock, it may be a good idea to analyze it in detail and potentially include it in your portfolio, despite the declining sentiment.
