We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Liberty Global plc (NASDAQ:LBTYA) and determine whether hedge funds skillfully traded this stock.
Is Liberty Global plc (NASDAQ:LBTYA) an excellent stock to buy now? The best stock pickers were buying. The number of long hedge fund bets inched up by 4 in recent months. Liberty Global plc (NASDAQ:LBTYA) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 64. Our calculations also showed that LBTYA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 30 hedge funds in our database with LBTYA positions at the end of the second quarter.
Seth Klarman of Baupost Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to view the key hedge fund action encompassing Liberty Global plc (NASDAQ:LBTYA).
Do Hedge Funds Think LBTYA Is A Good Stock To Buy Now?
At Q3’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LBTYA over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Seth Klarman’s Baupost Group has the most valuable position in Liberty Global plc (NASDAQ:LBTYA), worth close to $228.2 million, amounting to 2.1% of its total 13F portfolio. The second largest stake is Renaissance Technologies, with a $102.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, William Duhamel’s Route One Investment Company and Brandon Haley’s Holocene Advisors. In terms of the portfolio weights assigned to each position Lion Point allocated the biggest weight to Liberty Global plc (NASDAQ:LBTYA), around 6.98% of its 13F portfolio. Steel Canyon Capital is also relatively very bullish on the stock, designating 2.6 percent of its 13F equity portfolio to LBTYA.
As one would reasonably expect, key hedge funds have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, established the most valuable position in Liberty Global plc (NASDAQ:LBTYA). Holocene Advisors had $51 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $9 million investment in the stock during the quarter. The other funds with new positions in the stock are Daniel Gold’s QVT Financial, Israel Englander’s Millennium Management, and Bruce Kovner’s Caxton Associates LP.
Let’s go over hedge fund activity in other stocks similar to Liberty Global plc (NASDAQ:LBTYA). These stocks are Signature Bank (NASDAQ:SBNY), PPD, Inc. (NASDAQ:PPD), EXACT Sciences Corporation (NASDAQ:EXAS), Markel Corporation (NYSE:MKL), Viatris Inc. (NASDAQ:VTRS), Westinghouse Air Brake Technologies Corporation (NYSE:WAB), and Conagra Brands, Inc. (NYSE:CAG). All of these stocks’ market caps match LBTYA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBNY | 46 | 950619 | 3 |
| PPD | 37 | 1890261 | 0 |
| EXAS | 40 | 1984372 | 5 |
| MKL | 25 | 689937 | -8 |
| VTRS | 55 | 1466403 | 2 |
| WAB | 38 | 2982164 | -8 |
| CAG | 20 | 625323 | -9 |
| Average | 37.3 | 1512726 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.3 hedge funds with bullish positions and the average amount invested in these stocks was $1513 million. That figure was $791 million in LBTYA’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Conagra Brands, Inc. (NYSE:CAG) is the least popular one with only 20 bullish hedge fund positions. Liberty Global plc (NASDAQ:LBTYA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LBTYA is 44.9. 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 negative signal and 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 29.6% in 2021 and surpassed the market again by 3.6 percentage points. Unfortunately, LBTYA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); LBTYA investors were disappointed as the stock returned -9% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
