With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Liberty Oilfield Services Inc. (NYSE:LBRT).
Liberty Oilfield Services Inc. (NYSE:LBRT) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. LBRT has seen an increase in support from the world’s most elite money managers of late. There were 10 hedge funds in our database with LBRT holdings at the end of March. Our calculations also showed that LBRT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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. Keeping this in mind let’s take a look at the latest hedge fund action encompassing Liberty Oilfield Services Inc. (NYSE:LBRT).
Do Hedge Funds Think LBRT Is A Good Stock To Buy Now?
At second quarter’s end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in LBRT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Frank Fu’s CaaS Capital has the largest position in Liberty Oilfield Services Inc. (NYSE:LBRT), worth close to $10.4 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Dmitry Balyasny of Balyasny Asset Management, with a $6.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish consist of Steve Cohen’s Point72 Asset Management, Michael Gelband’s ExodusPoint Capital and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners. In terms of the portfolio weights assigned to each position Pinz Capital allocated the biggest weight to Liberty Oilfield Services Inc. (NYSE:LBRT), around 1.18% of its 13F portfolio. Element Capital Management is also relatively very bullish on the stock, earmarking 0.3 percent of its 13F equity portfolio to LBRT.
As industrywide interest jumped, specific money managers were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in Liberty Oilfield Services Inc. (NYSE:LBRT). Balyasny Asset Management had $6.9 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $6.8 million investment in the stock during the quarter. The following funds were also among the new LBRT investors: Michael Gelband’s ExodusPoint Capital, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Matthew L Pinz’s Pinz Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Liberty Oilfield Services Inc. (NYSE:LBRT) but similarly valued. We will take a look at Green Dot Corporation (NYSE:GDOT), Cedar Fair, L.P. (NYSE:FUN), Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NASDAQ:OMAB), Live Oak Bancshares Inc (NASDAQ:LOB), Proto Labs Inc (NYSE:PRLB), Tri Pointe Homes, Inc. (NYSE:TPH), and Sanmina Corporation (NASDAQ:SANM). This group of stocks’ market values match LBRT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GDOT | 22 | 538528 | -4 |
| FUN | 13 | 99875 | -1 |
| OMAB | 4 | 19340 | 0 |
| LOB | 11 | 98231 | 1 |
| PRLB | 19 | 361092 | 1 |
| TPH | 24 | 153445 | -2 |
| SANM | 21 | 128951 | 5 |
| Average | 16.3 | 199923 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $200 million. That figure was $66 million in LBRT’s case. Tri Pointe Homes, Inc. (NYSE:TPH) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NASDAQ:OMAB) is the least popular one with only 4 bullish hedge fund positions. Liberty Oilfield Services Inc. (NYSE:LBRT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LBRT is 80. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on LBRT as the stock returned 6% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Liberty Energy Inc.
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Disclosure: None. This article was originally published at Insider Monkey.
