Is LPSN Stock A Buy or Sell?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards LivePerson, Inc. (NASDAQ:LPSN).

Is LPSN stock a buy or sell? LivePerson, Inc. (NASDAQ:LPSN) investors should pay attention to an increase in hedge fund sentiment recently. LivePerson, Inc. (NASDAQ:LPSN) was in 35 hedge funds’ portfolios at the end of December. The all time high for this statistic is 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LPSN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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Dmitry Balyasny of Balyasny Asset Management

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Do Hedge Funds Think LPSN Is A Good Stock To Buy Now?

At fourth quarter’s end, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, a change of 35% from the previous quarter. On the other hand, there were a total of 23 hedge funds with a bullish position in LPSN a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

More specifically, Polar Capital was the largest shareholder of LivePerson, Inc. (NASDAQ:LPSN), with a stake worth $72.8 million reported as of the end of December. Trailing Polar Capital was Jericho Capital Asset Management, which amassed a stake valued at $50.8 million. G2 Investment Partners Management, Balyasny Asset Management, and Millennium 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 Provenire Capital allocated the biggest weight to LivePerson, Inc. (NASDAQ:LPSN), around 6.54% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, dishing out 4.27 percent of its 13F equity portfolio to LPSN.

With a general bullishness amongst the heavyweights, specific money managers have jumped into LivePerson, Inc. (NASDAQ:LPSN) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the biggest position in LivePerson, Inc. (NASDAQ:LPSN). Balyasny Asset Management had $22.3 million invested in the company at the end of the quarter. Highbridge Capital Management also made a $4.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Florian Kronawitter’s White Square Capital, Gregg Moskowitz’s Interval Partners, and Andrew Weiss’s Weiss Asset Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as LivePerson, Inc. (NASDAQ:LPSN) but similarly valued. These stocks are Novanta Inc. (NASDAQ:NOVT), JBG SMITH Properties (NYSE:JBGS), New Residential Investment Corp (NYSE:NRZ), Spirit AeroSystems Holdings, Inc. (NYSE:SPR), Vivint Smart Home, Inc. (NYSE:VVNT), Highwoods Properties Inc (NYSE:HIW), and Cosan Limited (NYSE:CZZ). This group of stocks’ market caps are similar to LPSN’s market cap.

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As you can see these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $255 million. That figure was $312 million in LPSN’s case. Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is the most popular stock in this table. On the other hand Cosan Limited (NYSE:CZZ) is the least popular one with only 8 bullish hedge fund positions. LivePerson, Inc. (NASDAQ:LPSN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LPSN is 80.9. 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. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and beat the market again by 0.4 percentage points. Unfortunately LPSN wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on LPSN were disappointed as the stock returned -11.3% since the end of December (through 4/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.