Should I Avoid Las Vegas Sands Corp. (LVS)?

With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Las Vegas Sands Corp. (NYSE:LVS).

Las Vegas Sands Corp. (NYSE:LVS) has seen a decrease in activity from the world’s largest hedge funds lately. Las Vegas Sands Corp. (NYSE:LVS) was in 48 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 63. There were 62 hedge funds in our database with LVS holdings at the end of March. Our calculations also showed that LVS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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 monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a peek at the new hedge fund action regarding Las Vegas Sands Corp. (NYSE:LVS).

Do Hedge Funds Think LVS Is A Good Stock To Buy Now?

At Q2’s end, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of -23% from the first quarter of 2020. On the other hand, there were a total of 47 hedge funds with a bullish position in LVS 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.

Among these funds, D E Shaw held the most valuable stake in Las Vegas Sands Corp. (NYSE:LVS), which was worth $308.2 million at the end of the second quarter. On the second spot was Melvin Capital Management which amassed $284.5 million worth of shares. Melvin Capital Management, Long Pond Capital, and Long Pond Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Long Pond Capital allocated the biggest weight to Las Vegas Sands Corp. (NYSE:LVS), around 6.45% of its 13F portfolio. Long Pond Capital is also relatively very bullish on the stock, setting aside 6.37 percent of its 13F equity portfolio to LVS.

Seeing as Las Vegas Sands Corp. (NYSE:LVS) has faced bearish sentiment from the smart money, we can see that there is a sect of hedge funds who were dropping their entire stakes in the second quarter. At the top of the heap, Daniel Sundheim’s D1 Capital Partners said goodbye to the largest stake of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $187.9 million in stock. Andrew Immerman and Jeremy Schiffman’s fund, Palestra Capital Management, also said goodbye to its stock, about $156.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 14 funds in the second quarter.

Let’s go over hedge fund activity in other stocks similar to Las Vegas Sands Corp. (NYSE:LVS). These stocks are PPG Industries, Inc. (NYSE:PPG), Cintas Corporation (NASDAQ:CTAS), Sempra (NYSE:SRE), CRH PLC (NYSE:CRH), SYSCO Corporation (NYSE:SYY), Pioneer Natural Resources Company (NYSE:PXD), and Parker-Hannifin Corporation (NYSE:PH). This group of stocks’ market values resemble LVS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PPG 26 233709 1
CTAS 21 539216 -11
SRE 28 343994 1
CRH 9 90599 0
SYY 40 2600524 -2
PXD 45 876323 8
PH 42 1446066 -1
Average 30.1 875776 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $876 million. That figure was $1759 million in LVS’s case. Pioneer Natural Resources Company (NYSE:PXD) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Las Vegas Sands Corp. (NYSE:LVS) is more popular among hedge funds. Our overall hedge fund sentiment score for LVS is 63.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Unfortunately LVS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LVS were disappointed as the stock returned -27.5% since the end of the second quarter (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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