Cheniere Energy, Inc. (LNG): Hedge Fund Sentiment Unchanged

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Cheniere Energy, Inc. (NYSE:LNG) in this article.

Cheniere Energy, Inc. (NYSE:LNG) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 49 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that LNG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare LNG to other stocks including Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Expedia Group Inc (NASDAQ:EXPE), and Sirius XM Holdings Inc (NASDAQ:SIRI) to get a better sense of its popularity.

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. Keeping this in mind let’s take a peek at the new hedge fund action encompassing Cheniere Energy, Inc. (NYSE:LNG).

Michael Lowenstein Kensico Capital

Michael Lowenstein of Kensico Capital

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

At Q3’s end, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LNG over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Cheniere Energy, Inc. (NYSE:LNG) was held by Icahn Capital LP, which reported holding $1579.2 million worth of stock at the end of September. It was followed by Kensico Capital with a $341.2 million position. Other investors bullish on the company included MFN Partners, Steadfast Capital Management, and Slate Path Capital. In terms of the portfolio weights assigned to each position Yost Capital Management allocated the biggest weight to Cheniere Energy, Inc. (NYSE:LNG), around 16.29% of its 13F portfolio. MFN Partners is also relatively very bullish on the stock, earmarking 12.77 percent of its 13F equity portfolio to LNG.

Due to the fact that Cheniere Energy, Inc. (NYSE:LNG) has faced a decline in interest from the smart money, it’s easy to see that there exists a select few money managers that decided to sell off their entire stakes last quarter. At the top of the heap, Himanshu Gulati’s Antara Capital cut the largest stake of the 750 funds followed by Insider Monkey, comprising about $17.3 million in stock, and Brian J. Higgins’s King Street Capital was right behind this move, as the fund cut about $17.3 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Cheniere Energy, Inc. (NYSE:LNG). We will take a look at Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Expedia Group Inc (NASDAQ:EXPE), Sirius XM Holdings Inc (NASDAQ:SIRI), Kansas City Southern (NYSE:KSU), Upstart Holdings, Inc. (NASDAQ:UPST), Yum China Holdings, Inc. (NYSE:YUMC), and The Hartford Financial Services Group Inc (NYSE:HIG). This group of stocks’ market valuations are similar to LNG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HZNP 60 4573780 4
EXPE 78 6470916 -9
SIRI 27 470025 1
KSU 59 4323096 -2
UPST 23 5076367 2
YUMC 30 832648 -2
HIG 34 941705 -9
Average 44.4 3241220 -2.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 44.4 hedge funds with bullish positions and the average amount invested in these stocks was $3241 million. That figure was $3103 million in LNG’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Upstart Holdings, Inc. (NASDAQ:UPST) is the least popular one with only 23 bullish hedge fund positions. Cheniere Energy, Inc. (NYSE:LNG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LNG is 52.3. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on LNG as the stock returned 7.6% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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