The financial regulations require hedge funds and wealthy investors that crossed the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 28th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Golar LNG Limited (NASDAQ:GLNG) based on those filings.
Golar LNG Limited (NASDAQ:GLNG) was in 23 hedge funds’ portfolios at the end of June. GLNG shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months. There were 28 hedge funds in our database with GLNG positions at the end of the previous quarter. Our calculations also showed that GLNG isn’t among the 30 most popular stocks among hedge funds (see the video below).
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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the new hedge fund action regarding Golar LNG Limited (NASDAQ:GLNG).
What have hedge funds been doing with Golar LNG Limited (NASDAQ:GLNG)?
At the end of the second quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GLNG over the last 16 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
The largest stake in Golar LNG Limited (NASDAQ:GLNG) was held by Orbis Investment Management, which reported holding $190.5 million worth of stock at the end of March. It was followed by Millennium Management with a $21.4 million position. Other investors bullish on the company included Carlson Capital, Citadel Investment Group, and Renaissance Technologies.
Seeing as Golar LNG Limited (NASDAQ:GLNG) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their full holdings by the end of the second quarter. Intriguingly, Christian Leone’s Luxor Capital Group dumped the biggest investment of all the hedgies monitored by Insider Monkey, valued at about $33 million in call options. Christian Leone’s fund, Luxor Capital Group, also sold off its call options, about $28 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 5 funds by the end of the second quarter.
Let’s go over hedge fund activity in other stocks similar to Golar LNG Limited (NASDAQ:GLNG). These stocks are Amkor Technology, Inc. (NASDAQ:AMKR), Jagged Peak Energy Inc. (NYSE:JAG), Progress Software Corporation (NASDAQ:PRGS), and ServisFirst Bancshares, Inc. (NASDAQ:SFBS). This group of stocks’ market values match GLNG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMKR | 19 | 73105 | -6 |
| JAG | 13 | 146861 | 1 |
| PRGS | 24 | 268304 | 0 |
| SFBS | 9 | 12767 | -1 |
| Average | 16.25 | 125259 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $125 million. That figure was $348 million in GLNG’s case. Progress Software Corporation (NASDAQ:PRGS) is the most popular stock in this table. On the other hand ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is the least popular one with only 9 bullish hedge fund positions. Golar LNG Limited (NASDAQ:GLNG) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately GLNG wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GLNG were disappointed as the stock returned -29.7% during the third quarter 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.
