Hedge Funds Are Selling LATAM Airlines Group SA (ADR) (LFL)

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Seeing as LATAM Airlines Group SA (ADR) (NYSE:LFL) has experienced declining sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers who were dropping their full holdings last quarter. At the top of the heap, Peter Muller’s PDT Partners dropped the largest position of all the hedgies monitored by Insider Monkey, valued at about $0.6 million in stock, and Matthew Tewksbury’s Stevens Capital Management was right behind this move, as the fund dropped about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to LATAM Airlines Group SA (ADR) (NYSE:LFL). These stocks are Dynegy Inc. (NYSE:DYN), Cal-Maine Foods Inc (NASDAQ:CALM), International Game Technology (NYSE:IGT), and The Cheesecake Factory Incorporated (NASDAQ:CAKE). This group of stocks’ market caps are closest to LFL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DYN 40 1175086 -12
CALM 25 352484 3
IGT 20 481138 1
CAKE 20 168602 -2

As you can see these stocks had an average of 26.25 hedge funds with bullish positions and the average amount invested in these stocks was $544 million. That figure was $19 million in LFL’s case. Dynegy Inc. (NYSE:DYN) is the most popular stock in this table. On the other hand International Game Technology (NYSE:IGT) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks LATAM Airlines Group SA (ADR) (NYSE:LFL) is even less popular than IGT. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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