Hedge Funds Are Dumping LPL Financial Holdings Inc (LPLA)

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Judging by the fact that LPL Financial Holdings Inc (NASDAQ:LPLA) has gone through bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few hedgies that decided to sell off their entire stakes last quarter. Interestingly, Millennium Management, one of the 10 largest hedge funds in the world got rid of the largest investment of all the investors followed by Insider Monkey, totaling close to $5 million in stock. David E. Shaw’s D E Shaw was right behind this move, as the fund dropped about $1.3 million worth of LPLA shares.

Let’s also examine hedge fund activity in other stocks similar to LPL Financial Holdings Inc (NASDAQ:LPLA). These stocks are REGAL-BELOIT CORPORATION (NYSE:RBC), Avista Corp (NYSE:AVA), The Medicines Company (NASDAQ:MDCO), and SM Energy Co. (NYSE:SM). This group of stocks’ market values resemble LPLA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RBC 21 158826 6
AVA 9 56026 -3
MDCO 27 584714 1
SM 28 322360 8

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $280 million. That figure was $965 million in LPLA’s case. SM Energy Co. (NYSE:SM) is the most popular stock in this table. On the other hand Avista Corp (NYSE:AVA) is the least popular one with only 9 bullish hedge fund positions. LPL Financial Holdings Inc (NASDAQ:LPLA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SM might be a better candidate to consider taking a long position in.

Disclosure: none.

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