Hedge Fund Sentiment Is Stagnant On Lloyds Banking Group PLC (LYG)

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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Lloyds Banking Group PLC (NYSE:LYG).

Lloyds Banking Group PLC (NYSE:LYG) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of March. Our calculations also showed that LYG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 IHS Markit Ltd. (NYSE:INFO), CrowdStrike Holdings, Inc. (NASDAQ:CRWD), and BCE Inc. (NYSE:BCE) to gather more data points.

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Ian Wace of Marshall Wace

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a peek at the key hedge fund action encompassing Lloyds Banking Group PLC (NYSE:LYG).

Do Hedge Funds Think LYG Is A Good Stock To Buy Now?

At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards LYG over the last 23 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

Among these funds, Citadel Investment Group held the most valuable stake in Lloyds Banking Group PLC (NYSE:LYG), which was worth $5.6 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $3.9 million worth of shares. Millennium Management, Marshall Wace LLP, and Citadel Investment Group 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 Renaissance Technologies allocated the biggest weight to Lloyds Banking Group PLC (NYSE:LYG), around 0.0049% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, designating 0.004 percent of its 13F equity portfolio to LYG.

Because Lloyds Banking Group PLC (NYSE:LYG) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there were a few funds that decided to sell off their positions entirely by the end of the first quarter. It’s worth mentioning that Steven Tananbaum’s GoldenTree Asset Management sold off the largest position of the “upper crust” of funds watched by Insider Monkey, worth about $3 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dumped about $0.2 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Lloyds Banking Group PLC (NYSE:LYG). We will take a look at IHS Markit Ltd. (NYSE:INFO), CrowdStrike Holdings, Inc. (NASDAQ:CRWD), BCE Inc. (NYSE:BCE), Parker-Hannifin Corporation (NYSE:PH), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), Bilibili Inc. (NASDAQ:BILI), and SYSCO Corporation (NYSE:SYY). All of these stocks’ market caps are closest to LYG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 42.6 hedge funds with bullish positions and the average amount invested in these stocks was $2398 million. That figure was $14 million in LYG’s case. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Lloyds Banking Group PLC (NYSE:LYG) is even less popular than BCE. Our overall hedge fund sentiment score for LYG is 18.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on LYG, though not to the same extent, as the stock returned 10.5% since the end of March (through June 18th) and outperformed the market as well.

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