Is L Brands Inc (LB) a Good Buy?

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Due to the fact that L Brands Inc (NYSE:LB) has experienced declining sentiment from hedge fund managers, it’s easy to see that there exists a select few hedge funds that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Jim Simons’ Renaissance Technologies dumped the biggest position of the 700 funds watched by Insider Monkey, valued at an estimated $73.9 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also dumped its stock, about $25.9 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks similar to L Brands Inc (NYSE:LB). We will take a look at BB&T Corporation (NYSE:BBT), Synchrony Financial (NYSE:SYF), American Airlines Group Inc (NASDAQ:AAL), and Intercontinental Exchange Inc (NYSE:ICE). This group of stocks’ market values are similar to LB’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BBT 30 791692 9
SYF 21 291570 8
AAL 77 1824096 -8
ICE 38 2017380 -5

As you can see these stocks had an average of 41.5 hedge funds with bullish positions and the average amount invested in these stocks was $1231 million. That figure was $2211 million in LB’s case. American Airlines Group Inc (NASDAQ:AAL) is the most popular stock in this table. On the other hand Synchrony Financial (NYSE:SYF) is the least popular one with only 21 bullish hedge fund positions. L Brands Inc (NYSE:LB) 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 AAL might be a better candidate to consider a long position.

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