Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in The Liberty SiriusXM Group (NASDAQ:LSXMA)? The smart money sentiment can provide an answer to this question.
The Liberty SiriusXM Group (NASDAQ:LSXMA) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. Our calculations also showed that LSXMA isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a large number of metrics investors use to analyze their stock investments. A couple of the most innovative metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the S&P 500 by a very impressive margin (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, 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 go over the new hedge fund action encompassing The Liberty SiriusXM Group (NASDAQ:LSXMA).
Hedge fund activity in The Liberty SiriusXM Group (NASDAQ:LSXMA)
At Q2’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LSXMA over the last 16 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Andrew Raab of FPR Partners
Of the funds tracked by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the biggest position in The Liberty SiriusXM Group (NASDAQ:LSXMA). Berkshire Hathaway has a $561.9 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is D E Shaw, managed by D. E. Shaw, which holds a $124.4 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass Bob Peck and Andy Raab’s FPR Partners, Ken Griffin’s Citadel Investment Group and Doug Silverman and Alexander Klabin’s Senator Investment Group.
Judging by the fact that The Liberty SiriusXM Group (NASDAQ:LSXMA) has faced falling interest from the smart money, it’s easy to see that there were a few hedgies that elected to cut their full holdings last quarter. Interestingly, Steve Cohen’s Point72 Asset Management sold off the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $45.8 million in stock. Jeff Lignelli’s fund, Incline Global Management, also dropped its stock, about $17.6 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 7 funds last quarter.
Let’s also examine hedge fund activity in other stocks similar to The Liberty SiriusXM Group (NASDAQ:LSXMA). These stocks are InterContinental Hotels Group PLC (NYSE:IHG), Campbell Soup Company (NYSE:CPB), W.R. Berkley Corporation (NYSE:WRB), and NVR, Inc. (NYSE:NVR). This group of stocks’ market values match LSXMA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IHG | 4 | 21692 | -1 |
| CPB | 26 | 953095 | -2 |
| WRB | 23 | 319842 | 5 |
| NVR | 27 | 971715 | 2 |
| Average | 20 | 566586 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $567 million. That figure was $1328 million in LSXMA’s case. NVR, Inc. (NYSE:NVR) is the most popular stock in this table. On the other hand InterContinental Hotels Group PLC (NYSE:IHG) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks The Liberty SiriusXM Group (NASDAQ:LSXMA) is more popular among hedge funds. 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. Hedge funds were also right about betting on LSXMA as the stock returned 9.9% during Q3 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
