At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Liberty Global Plc (NASDAQ:LBTYK) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that LBTYK isn’t among the 30 most popular stocks among hedge funds.
Today there are a multitude of indicators stock market investors use to evaluate stocks. A duo of the best indicators are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top money managers can outperform the broader indices by a healthy margin (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a glance at the key hedge fund action regarding Liberty Global Plc (NASDAQ:LBTYK).
What does smart money think about Liberty Global Plc (NASDAQ:LBTYK)?
At the end of the second quarter, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the previous quarter. By comparison, 40 hedge funds held shares or bullish call options in LBTYK a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Seth Klarman’s Baupost Group has the biggest position in Liberty Global Plc (NASDAQ:LBTYK), worth close to $1.1126 billion, corresponding to 10.1% of its total 13F portfolio. The second largest stake is held by Eagle Capital Management, led by Boykin Curry, holding a $1.0643 billion position; 3.7% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions contain William Duhamel’s Route One Investment Company, Warren Buffett’s Berkshire Hathaway and Michael Pausic’s Foxhaven Asset Management.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Manor Road Capital Partners, managed by John Ku, established the most valuable call position in Liberty Global Plc (NASDAQ:LBTYK). Manor Road Capital Partners had $86.2 million invested in the company at the end of the quarter. Farhad Nanji and Michael DeMichele’s MFN Partners also initiated a $16.6 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Andre F. Perold’s HighVista Strategies, and David Andre and Astro Teller’s Cerebellum Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Liberty Global Plc (NASDAQ:LBTYK) but similarly valued. These stocks are Concho Resources Inc. (NYSE:CXO), Halliburton Company (NYSE:HAL), Weyerhaeuser Company (NYSE:WY), and Palo Alto Networks Inc (NYSE:PANW). This group of stocks’ market values are similar to LBTYK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CXO | 27 | 552132 | 1 |
| HAL | 33 | 935104 | -5 |
| WY | 28 | 415491 | 3 |
| PANW | 45 | 2343774 | 1 |
| Average | 33.25 | 1061625 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.25 hedge funds with bullish positions and the average amount invested in these stocks was $1062 million. That figure was $3769 million in LBTYK’s case. Palo Alto Networks Inc (NYSE:PANW) is the most popular stock in this table. On the other hand Concho Resources Inc. (NYSE:CXO) is the least popular one with only 27 bullish hedge fund positions. Liberty Global Plc (NASDAQ:LBTYK) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately LBTYK wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LBTYK were disappointed as the stock returned -10.3% during the third quarter 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 (see the video below) among hedge funds as many of these stocks already outperformed the market so far this year.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
