The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Louisiana-Pacific Corporation (NYSE:LPX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Louisiana-Pacific Corporation (NYSE:LPX) going to take off soon? The best stock pickers are turning less bullish. The number of long hedge fund bets retreated by 3 in recent months. Our calculations also showed that lpx 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.
We’re going to take a look at the recent hedge fund action surrounding Louisiana-Pacific Corporation (NYSE:LPX).
Hedge fund activity in Louisiana-Pacific Corporation (NYSE:LPX)
At the end of the first quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LPX over the last 15 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in Louisiana-Pacific Corporation (NYSE:LPX), which was worth $84.6 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $71.8 million worth of shares. Moreover, GLG Partners, Citadel Investment Group, and Owl Creek Asset Management were also bullish on Louisiana-Pacific Corporation (NYSE:LPX), allocating a large percentage of their portfolios to this stock.
Due to the fact that Louisiana-Pacific Corporation (NYSE:LPX) has witnessed declining sentiment from the smart money, it’s easy to see that there was a specific group of fund managers that elected to cut their full holdings in the third quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP cut the biggest stake of the 700 funds watched by Insider Monkey, valued at an estimated $11.9 million in stock, and Daniel Arbess’s Perella Weinberg Partners was right behind this move, as the fund dumped about $3.1 million worth. These moves are important to note, as aggregate hedge fund interest fell by 3 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Louisiana-Pacific Corporation (NYSE:LPX) but similarly valued. These stocks are Tenable Holdings, Inc. (NASDAQ:TENB), Houlihan Lokey Inc (NYSE:HLI), Magnolia Oil & Gas Corporation (NYSE:MGY), and Patterson-UTI Energy, Inc. (NASDAQ:PTEN). This group of stocks’ market valuations are similar to LPX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TENB | 20 | 153935 | 5 |
| HLI | 14 | 132102 | -4 |
| MGY | 32 | 232014 | 0 |
| PTEN | 34 | 301384 | -5 |
| Average | 25 | 204859 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $205 million. That figure was $462 million in LPX’s case. Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is the most popular stock in this table. On the other hand Houlihan Lokey Inc (NYSE:HLI) is the least popular one with only 14 bullish hedge fund positions. Louisiana-Pacific Corporation (NYSE:LPX) 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 LPX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LPX were disappointed as the stock returned -6.1% 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.
