Is LYB Stock A Buy or Sell?

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards LyondellBasell Industries NV (NYSE:LYB).

Is LYB stock a buy? LyondellBasell Industries NV (NYSE:LYB) has seen a decrease in support from the world’s most elite money managers recently. LyondellBasell Industries NV (NYSE:LYB) was in 27 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 57. Our calculations also showed that LYB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

To the average investor there are plenty of gauges shareholders have at their disposal to size up their stock investments. A pair of the most under-the-radar gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best money managers can outpace the broader indices by a significant margin (see the details here).

David Harding of Winton Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s take a gander at the recent hedge fund action surrounding LyondellBasell Industries NV (NYSE:LYB).

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

At Q4’s end, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards LYB over the last 22 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in LyondellBasell Industries NV (NYSE:LYB) was held by Eagle Capital Management, which reported holding $305.9 million worth of stock at the end of December. It was followed by Arrowstreet Capital with a $136.9 million position. Other investors bullish on the company included Citadel Investment Group, Platinum Asset Management, and Millennium Management. In terms of the portfolio weights assigned to each position Elm Ridge Capital allocated the biggest weight to LyondellBasell Industries NV (NYSE:LYB), around 2.92% of its 13F portfolio. Bourgeon Capital is also relatively very bullish on the stock, setting aside 2.47 percent of its 13F equity portfolio to LYB.

Since LyondellBasell Industries NV (NYSE:LYB) has faced falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of fund managers that decided to sell off their entire stakes by the end of the fourth quarter. Interestingly, Steve Cohen’s Point72 Asset Management said goodbye to the largest position of the 750 funds watched by Insider Monkey, worth an estimated $25.7 million in stock, and Clint Murray’s Lodge Hill Capital was right behind this move, as the fund dumped about $11.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 4 funds by the end of the fourth quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as LyondellBasell Industries NV (NYSE:LYB) but similarly valued. We will take a look at Phillips 66 (NYSE:PSX), XPeng Inc. (NYSE:XPEV), Ball Corporation (NYSE:BLL), Schlumberger Limited. (NYSE:SLB), Copart, Inc. (NASDAQ:CPRT), Datadog, Inc. (NASDAQ:DDOG), and Chunghwa Telecom Co., Ltd (NYSE:CHT). This group of stocks’ market values match LYB’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.1 hedge funds with bullish positions and the average amount invested in these stocks was $1054 million. That figure was $683 million in LYB’s case. Datadog, Inc. (NASDAQ:DDOG) is the most popular stock in this table. On the other hand Chunghwa Telecom Co., Ltd (NYSE:CHT) is the least popular one with only 5 bullish hedge fund positions. LyondellBasell Industries NV (NYSE:LYB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LYB is 38.6. 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. 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 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on LYB as the stock returned 18.1% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.

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

Follow Insider Monkey on Twitter