Coronavirus is probably the #1 concern in investors’ minds right now. It should be. On February 27th we published this article and predicted that US stocks will go down by at least 20% in the next 3-6 months. We also told you to short the market ETFs and buy long-term bonds. Investors who agreed with us and replicated these trades are up double digits whereas the market is down double digits. In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. We at Insider Monkey have gone over 835 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of The Liberty SiriusXM Group (NASDAQ:LSXMA) based on that data.
The Liberty SiriusXM Group (NASDAQ:LSXMA) shareholders have witnessed an increase in hedge fund sentiment lately. LSXMA was in 50 hedge funds’ portfolios at the end of December. There were 41 hedge funds in our database with LSXMA positions at the end of the previous quarter. Our calculations also showed that LSXMA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Andrew Raab of FPR Partners
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. In January, we recommended a long position in one of the most shorted stocks in the market, and that stock returned more than 50% despite the large losses in the market since our recommendation. With all of this in mind let’s take a peek at the new hedge fund action encompassing The Liberty SiriusXM Group (NASDAQ:LSXMA).
What does smart money think about The Liberty SiriusXM Group (NASDAQ:LSXMA)?
At Q4’s end, a total of 50 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the previous quarter. On the other hand, there were a total of 39 hedge funds with a bullish position in LSXMA a year ago. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, Berkshire Hathaway was the largest shareholder of The Liberty SiriusXM Group (NASDAQ:LSXMA), with a stake worth $718.4 million reported as of the end of September. Trailing Berkshire Hathaway was D E Shaw, which amassed a stake valued at $167.4 million. FPR Partners, Citadel Investment Group, and Foxhaven Asset Management 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 Swift Run Capital Management allocated the biggest weight to The Liberty SiriusXM Group (NASDAQ:LSXMA), around 7.8% of its 13F portfolio. Tiger Eye Capital is also relatively very bullish on the stock, earmarking 6.87 percent of its 13F equity portfolio to LSXMA.
Consequently, specific money managers have jumped into The Liberty SiriusXM Group (NASDAQ:LSXMA) headfirst. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, created the biggest position in The Liberty SiriusXM Group (NASDAQ:LSXMA). LMR Partners had $29 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $12.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Brandon Haley’s Holocene Advisors, and Stephen J. Errico’s Locust Wood Capital Advisers.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as The Liberty SiriusXM Group (NASDAQ:LSXMA) but similarly valued. These stocks are Live Nation Entertainment, Inc. (NYSE:LYV), Principal Financial Group Inc (NASDAQ:PFG), SK Telecom Co., Ltd. (NYSE:SKM), and The Liberty SiriusXM Group (NASDAQ:LSXMK). All of these stocks’ market caps are similar to LSXMA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LYV | 44 | 1666010 | 0 |
| PFG | 20 | 89558 | 0 |
| SKM | 6 | 135263 | -1 |
| LSXMK | 54 | 3333126 | 5 |
| Average | 31 | 1305989 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $1306 million. That figure was $1786 million in LSXMA’s case. The Liberty SiriusXM Group (NASDAQ:LSXMK) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 6 bullish hedge fund positions. The Liberty SiriusXM Group (NASDAQ:LSXMA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 12.9% in 2020 through March 9th but beat the market by 1.9 percentage points. Unfortunately LSXMA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LSXMA were disappointed as the stock returned -16.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
