Hedge Funds Were Selling These 10 Mid-Caps In Q3, Part 2

Cheniere Energy Inc. (NYSEMKT:LNG)

 – Investors with Long Positions (as of September 30): 62

 – Aggregate Value of Investors’ Holdings (as of September 30): $7.12 Billion

The number of smart money investors with long positions in Cheniere Energy Inc. (NYSEMKT:LNG) dropped to 62 from 76 during the September quarter, while the value of these positions shrank to $7.12 billion from $9.01 billion quarter-over-quarter. It is also worth mentioning that a massive 62.30% of the company’s shares were owned by the hedge funds monitored by Insider Monkey on September 30. The shares of the Houston-based energy company, which is mainly engaged in LNG-related activity, are down by 8% so far this quarter, as analysts anticipate that the global supply glut of liquefied natural gas (LNG) is likely to hang around for the foreseeable future. The fast-increasing LNG capacity, mainly as a result of increased output in the United States, Australia, and Angola, comes at a time when the demand growth for LNG is slumping. For instance, China’s imports of LNG declined by 3.7% year-over-year in the first eight months of this year. According to a freshly-amended 13D filing with the SEC, activist investor Carl Icahn of Icahn Capital LP owns 29.87 million shares of Cheniere Energy Inc. (NYSEMKT:LNG), accounting for 12.65% of the company’s shares.

Twitter Inc. (NYSE:TWTR)

 – Investors with Long Positions (as of September 30): 27

 – Aggregate Value of Investors’ Holdings (as of September 30): $248.32 Million

Twitter Inc. (NYSE:TWTR) failed to impress hedge fund investors during the third quarter, as the number of smart money investors with stakes in the company declined to 27 from 47 quarter-over-quarter. Even more to that, the overall value of their stakes plummeted to $248.32 million from $701.39 million during the three-month period. It seems that these investors abandoned their stakes in Twitter too late, as the stock had lost more than 30% since its 52-week high recorded in April, through the end of the second quarter. Twitter shares are down by 7% this quarter, extending their year-to-date loss to more than 30%. Twitter’s user base and users’ level of engagement stand behind the company’s future financial performance. However, investors have become increasingly worried about the company’s user growth, which has been slowing down over the past few quarters. Twitter had 320 million average monthly active users during the third quarter, which marked an increase of 11% year-over-year. The growth in the average MAUs in the United States was even lower in the third quarter, increasing by a mere 4% year-over-year to 66 million. D. E. Shaw & Co. L.P., founded by David E. Shaw back in 1988, cut its exposure to Twitter Inc. (NYSE:TWTR) by 4% during the July-to-September period, ending the recent quarter with 1.08 million shares.

Verisk Analytics Inc. (NASDAQ:VRSK)

 – Investors with Long Positions (as of September 30): 28

 – Aggregate Value of Investors’ Holdings (as of September 30): $723.63 Million

Hedge funds investors tracked by the Insider Monkey team were running away from Verisk Analytics Inc. (NASDAQ:VRSK) during the third quarter as well. The number of smart money investors with long positions in the company dropped to 28 from 37 during the quarter, while the value of their positions decreased to $723.63 million from $933.74 million quarter-over-quarter. The shares of the data analytics and risk assessment firm are 2% in the green this quarter, generating a return of 17% year-to-date. One could argue that hedge funds made the right choice by cashing out their holdings in the company, considering its relatively rich trailing price-to-earnings ratio of 25.53. This compares with the average of 22.71 for the companies included in the S&P 500 benchmark. Verisk delivered strong revenue growth this year, as its revenue for the nine-month period that ended September 30 amounted to $1.51 billion, denoting an increase of 17.6% year-over-year. Warren Buffett’s Berkshire Hathaway owns 1.56 million shares of Verisk Analytics Inc. (NASDAQ:VRSK) as of September 30.

Disclosure: None