Where Do Hedge Funds Stand On Liberty Global plc (LBTYA)?

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 Liberty Global plc (NASDAQ:LBTYA)? The smart money sentiment can provide an answer to this question.

Liberty Global plc (NASDAQ:LBTYA) shareholders have witnessed a decrease in enthusiasm from smart money lately. Liberty Global plc (NASDAQ:LBTYA) was in 35 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 64. There were 36 hedge funds in our database with LBTYA positions at the end of the fourth quarter. Our calculations also showed that LBTYA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Andy Redleaf of Whitebox Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. 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 homepage. Keeping this in mind we’re going to go over the new hedge fund action encompassing Liberty Global plc (NASDAQ:LBTYA).

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

At the end of March, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards LBTYA over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Liberty Global plc (NASDAQ:LBTYA) was held by Baupost Group, which reported holding $196.5 million worth of stock at the end of December. It was followed by Route One Investment Company with a $157.1 million position. Other investors bullish on the company included Renaissance Technologies, Berkshire Hathaway, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Lion Point allocated the biggest weight to Liberty Global plc (NASDAQ:LBTYA), around 5.84% of its 13F portfolio. Route One Investment Company is also relatively very bullish on the stock, dishing out 3.96 percent of its 13F equity portfolio to LBTYA.

Due to the fact that Liberty Global plc (NASDAQ:LBTYA) has witnessed declining sentiment from the smart money, we can see that there is a sect of funds who sold off their positions entirely last quarter. It’s worth mentioning that David Harding’s Winton Capital Management sold off the biggest position of all the hedgies monitored by Insider Monkey, valued at close to $1.5 million in stock. Ray Dalio’s fund, Bridgewater Associates, also sold off its stock, about $1.1 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds last quarter.

Let’s now review hedge fund activity in other stocks similar to Liberty Global plc (NASDAQ:LBTYA). These stocks are The Boston Beer Company Inc (NYSE:SAM), Devon Energy Corporation (NYSE:DVN), Ares Management Corp (NYSE:ARES), Cognex Corporation (NASDAQ:CGNX), Lumen Technologies, Inc. (NYSE:LUMN), News Corp (NASDAQ:NWS), and News Corp (NASDAQ:NWSA). This group of stocks’ market valuations match LBTYA’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $835 million. That figure was $848 million in LBTYA’s case. Devon Energy Corporation (NYSE:DVN) is the most popular stock in this table. On the other hand Ares Management Corp (NYSE:ARES) is the least popular one with only 16 bullish hedge fund positions. Liberty Global plc (NASDAQ:LBTYA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LBTYA is 46.8. 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 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on LBTYA, though not to the same extent, as the stock returned 10.8% since Q1 (through June 25th) and outperformed the market as well.

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