Is Leucadia National Corp. (LUK) A Good Stock To Buy?

Due to the fact that Leucadia National Corp. (NYSE:LUK) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few funds that slashed their entire stakes heading into Q4. It’s worth mentioning that Cliff Asness’ AQR Capital Management cut the biggest stake of the 700 funds watched by Insider Monkey, worth an estimated $4.7 million in stock. George Soros’ Soros Fund Management, also sold off its stock, about $4.1 million worth. These moves are interesting, as total hedge fund interest dropped by 3 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Leucadia National Corp. (NYSE:LUK) but similarly valued. We will take a look at Barrick Gold Corporation (USA) (NYSE:ABX), HCC Insurance Holdings, Inc. (NYSE:HCC), Willis Group Holdings PLC (NYSE:WSH), and News Corp (NASDAQ:NWSA). This group of stocks’ market values resemble LUK’s market value.

As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1.29 billion. That figure was $748 million in LUK’s case. Barrick Gold Corporation (USA) (NYSE:ABX) is the most popular stock in this table with a total of 40 funds disclosing bullish positions. On the other hand Willis Group Holdings PLC (NYSE:WSH) is the least popular one with 27 funds reporting stakes. Compared to these stocks, Leucadia National Corp. (NYSE:LUK) is even less popular than WSH. 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.