Hedge Funds Are Selling Las Vegas Sands Corp. (LVS)

Hedge funds and other investment firms run by legendary investors like Israel Englander, Jeffrey Talpins and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Las Vegas Sands Corp. (NYSE:LVS) has seen a decrease in activity from the world’s largest hedge funds lately. Our calculations also showed that lvs isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.


Cliff Asness of AQR Capital Management

We’re going to view the latest hedge fund action regarding Las Vegas Sands Corp. (NYSE:LVS).

What have hedge funds been doing with Las Vegas Sands Corp. (NYSE:LVS)?

At the end of the first quarter, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards LVS over the last 15 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

No of Hedge Funds with LVS Positions

Of the funds tracked by Insider Monkey, Melvin Capital Management, managed by Gabriel Plotkin, holds the biggest position in Las Vegas Sands Corp. (NYSE:LVS). Melvin Capital Management has a $395.1 million position in the stock, comprising 4.6% of its 13F portfolio. Coming in second is Two Sigma Advisors, led by John Overdeck and David Siegel, holding a $186.2 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions contain D. E. Shaw’s D E Shaw, and Cliff Asness’s AQR Capital Management.

Since Las Vegas Sands Corp. (NYSE:LVS) has faced a decline in interest from the smart money, it’s safe to say that there lies a certain “tier” of money managers that elected to cut their full holdings last quarter. Interestingly, Ricky Sandler’s Eminence Capital said goodbye to the largest stake of all the hedgies followed by Insider Monkey, comprising close to $44 million in call options. Leon Shaulov’s fund, Maplelane Capital, also dropped its call options, about $31.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 7 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Las Vegas Sands Corp. (NYSE:LVS) but similarly valued. These stocks are ING Groep N.V. (NYSE:ING), America Movil SAB de CV (NYSE:AMX), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), and Illinois Tool Works Inc. (NYSE:ITW). All of these stocks’ market caps are closest to LVS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ING 10 491851 3
AMX 14 234341 2
VRTX 45 2285930 6
ITW 27 315022 -1
Average 24 831786 2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $832 million. That figure was $1709 million in LVS’s case. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the most popular stock in this table. On the other hand ING Groep N.V. (NYSE:ING) is the least popular one with only 10 bullish hedge fund positions. Las Vegas Sands Corp. (NYSE:LVS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately LVS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LVS were disappointed as the stock returned -8.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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