Here is What Hedge Funds Think About LG Display Co Ltd. (ADR) (LPL)

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. The second half of 2015 and the first few months of this year was a stressful period for hedge funds. However, things have been taking a turn for the better in the second half of this year. Small-cap stocks which hedge funds are usually overweight outperformed the market by double digits and it may be a good time to pay attention to hedge funds’ picks before it is too late. In this article we are going to analyze the hedge fund sentiment towards LG Display Co Ltd. (ADR) (NYSE:LPL).

LG Display Co Ltd. (ADR) (NYSE:LPL) has experienced a decrease in enthusiasm from smart money of late. LPL was in 12 hedge funds’ portfolios at the end of September. There were 13 hedge funds in our database with LPL positions at the end of the previous quarter. At the end of this article we will also compare LPL to other stocks including Garmin Ltd. (NASDAQ:GRMN), Tiffany & Co. (NYSE:TIF), and Whole Foods Market, Inc. (NASDAQ:WFM) to get a better sense of its popularity.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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Now, let’s take a look at the key action encompassing LG Display Co Ltd. (ADR) (NYSE:LPL).

How have hedgies been trading LG Display Co Ltd. (ADR) (NYSE:LPL)?

Heading into the fourth quarter of 2016, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, down 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LPL over the last 5 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in LG Display Co Ltd. (ADR) (NYSE:LPL). According to regulatory filings, the fund has a $25.3 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is William B. Gray of Orbis Investment Management, with a $6 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish contain Ernest Chow and Jonathan Howe’s Sensato Capital Management, Ken Hahn’s Quentec Asset Management and Renaissance Technologies, one of the largest hedge funds in the world. We should note that two of these hedge funds (Orbis Investment Management and Sensato Capital Management) are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually sold off their positions entirely. It’s worth mentioning that Leon Shaulov’s Maplelane Capital sold off the biggest stake of all the investors watched by Insider Monkey, valued at close to $7.4 million in call options, and Leon Shaulov’s Maplelane Capital was right behind this move, as the fund dumped about $4.6 million worth of LG Display Co Ltd. (ADR) (NYSE:LPL) shares.

Let’s also examine hedge fund activity in other stocks similar to LG Display Co Ltd. (ADR) (NYSE:LPL). We will take a look at Garmin Ltd. (NASDAQ:GRMN), Tiffany & Co. (NYSE:TIF), Whole Foods Market, Inc. (NASDAQ:WFM), and Foot Locker, Inc. (NYSE:FL). All of these stocks’ market caps are similar to LPL’s market cap.

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 $624 million. That figure was a meager $46 million in LPL’s case. Tiffany & Co. (NYSE:TIF) is the most popular stock in this table. On the other hand Garmin Ltd. (NASDAQ:GRMN) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks LG Display Co Ltd. (ADR) (NYSE:LPL) is even less popular than GRMN. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: none.