At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not LyondellBasell Industries NV (NYSE:LYB) makes for a good investment right now.
Is LYB a good stock to buy? LyondellBasell Industries NV (NYSE:LYB) has experienced a decrease in enthusiasm from smart money recently. LyondellBasell Industries NV (NYSE:LYB) was in 41 hedge funds’ portfolios at the end of June. The all time high for this statistic is 57. There were 47 hedge funds in our database with LYB positions at the end of the first quarter. Our calculations also showed that LYB isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Boykin Curry of Eagle Capital
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Do Hedge Funds Think LYB Is A Good Stock To Buy Now?
At the end of June, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LYB over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Eagle Capital Management was the largest shareholder of LyondellBasell Industries NV (NYSE:LYB), with a stake worth $301.4 million reported as of the end of June. Trailing Eagle Capital Management was Citadel Investment Group, which amassed a stake valued at $149.1 million. Holocene Advisors, Platinum Asset Management, and Samlyn Capital 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 Napier Park Global Capital allocated the biggest weight to LyondellBasell Industries NV (NYSE:LYB), around 14.39% of its 13F portfolio. Elm Ridge Capital is also relatively very bullish on the stock, dishing out 3.34 percent of its 13F equity portfolio to LYB.
Because LyondellBasell Industries NV (NYSE:LYB) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few money managers that elected to cut their full holdings by the end of the second quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP cut the largest stake of the 750 funds monitored by Insider Monkey, valued at about $35.2 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dropped about $34 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 6 funds by the end of the second quarter.
Let’s now review hedge fund activity in other stocks similar to LyondellBasell Industries NV (NYSE:LYB). These stocks are Yum! Brands, Inc. (NYSE:YUM), Archer Daniels Midland Company (NYSE:ADM), Hilton Worldwide Holdings Inc (NYSE:HLT), Zimmer Biomet Holdings Inc (NYSE:ZBH), Rockwell Automation Inc. (NYSE:ROK), Chewy, Inc. (NYSE:CHWY), and Stanley Black & Decker, Inc. (NYSE:SWK). All of these stocks’ market caps are closest to LYB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YUM | 35 | 652331 | 3 |
| ADM | 41 | 837799 | 7 |
| HLT | 45 | 4558478 | -2 |
| ZBH | 48 | 1785063 | -2 |
| ROK | 25 | 535840 | -1 |
| CHWY | 43 | 634747 | 11 |
| SWK | 44 | 987529 | 11 |
| Average | 40.1 | 1427398 | 3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.1 hedge funds with bullish positions and the average amount invested in these stocks was $1427 million. That figure was $888 million in LYB’s case. Zimmer Biomet Holdings Inc (NYSE:ZBH) is the most popular stock in this table. On the other hand Rockwell Automation Inc. (NYSE:ROK) is the least popular one with only 25 bullish hedge fund positions. LyondellBasell Industries NV (NYSE:LYB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LYB is 55.4. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and beat the market again by 4.4 percentage points. Unfortunately LYB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LYB were disappointed as the stock returned -4.2% since the end of June (through 10/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
