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Hedge Funds Have Never Been This Bullish On The Liberty SiriusXM Group (LSXMA)

It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren’t usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index’s returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you’d fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of 6 percentage points during the first 5 months of 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in The Liberty SiriusXM Group (NASDAQ:LSXMA).

Is The Liberty SiriusXM Group (NASDAQ:LSXMA) a buy here? Investors who are in the know are getting more optimistic. The number of long hedge fund bets moved up by 2 in recent months. Our calculations also showed that lsxma isn’t among the 30 most popular stocks among hedge funds.

In the eyes of most investors, hedge funds are seen as slow, outdated investment tools of the past. While there are greater than 8000 funds with their doors open today, Our researchers choose to focus on the elite of this group, about 750 funds. Most estimates calculate that this group of people preside over the lion’s share of all hedge funds’ total asset base, and by keeping track of their top stock picks, Insider Monkey has uncovered a number of investment strategies that have historically beaten the market. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.

Warren Buffett and Billionaires

Let’s take a look at the recent hedge fund action encompassing The Liberty SiriusXM Group (NASDAQ:LSXMA).

What have hedge funds been doing with The Liberty SiriusXM Group (NASDAQ:LSXMA)?

At the end of the first quarter, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. By comparison, 38 hedge funds held shares or bullish call options in LSXMA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with LSXMA Positions

Of the funds tracked by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the number one position in The Liberty SiriusXM Group (NASDAQ:LSXMA). Berkshire Hathaway has a $567.4 million position in the stock, comprising 0.3% of its 13F portfolio. On Berkshire Hathaway’s heels is D E Shaw, led by D. E. Shaw, holding a $138 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism contain Bob Peck and Andy Raab’s FPR Partners, and Ken Griffin’s Citadel Investment Group.

As one would reasonably expect, specific money managers were leading the bulls’ herd. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, initiated the most outsized position in The Liberty SiriusXM Group (NASDAQ:LSXMA). Senator Investment Group had $39.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $3.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew Tewksbury’s Stevens Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to The Liberty SiriusXM Group (NASDAQ:LSXMA). We will take a look at The Liberty SiriusXM Group (NASDAQ:LSXMK), Autohome Inc (NYSE:ATHM), Huazhu Group Limited (NASDAQ:HTHT), and BanColombia S.A. (NYSE:CIB). This group of stocks’ market caps are closest to LSXMA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LSXMK 45 2653274 0
ATHM 16 1251641 2
HTHT 14 196127 -1
CIB 11 154486 5
Average 21.5 1063882 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $1064 million. That figure was $1345 million in LSXMA’s case. The Liberty SiriusXM Group (NASDAQ:LSXMK) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 11 bullish hedge fund positions. The Liberty SiriusXM Group (NASDAQ:LSXMA) 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 LSXMA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LSXMA were disappointed as the stock returned -4% 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.

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