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Should You Avoid Liberty Media Corporation (LSXMA)?

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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Liberty Media Corporation (NASDAQ:LSXMA)?

Liberty Media Corporation (NASDAQ:LSXMA) has seen a decrease in enthusiasm from smart money of late. LSXMA was in 48 hedge funds’ portfolios at the end of the first quarter of 2020. There were 50 hedge funds in our database with LSXMA holdings at the end of the previous quarter. Our calculations also showed that LSXMA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most investors, hedge funds are seen as worthless, outdated financial vehicles of years past. While there are over 8000 funds in operation at the moment, Our researchers hone in on the masters of this club, approximately 850 funds. These hedge fund managers control the majority of all hedge funds’ total asset base, and by keeping an eye on their matchless picks, Insider Monkey has unearthed several investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

BAUPOST GROUP Seth Klarman

Seth Klarman of Baupost Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. Also, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a glance at the new hedge fund action surrounding Liberty Media Corporation (NASDAQ:LSXMA).

What have hedge funds been doing with Liberty Media Corporation (NASDAQ:LSXMA)?

At Q1’s end, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LSXMA over the last 18 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Is LSXMA A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the most valuable position in Liberty Media Corporation (NASDAQ:LSXMA). Berkshire Hathaway has a $470.9 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is D E Shaw, led by D. E. Shaw, holding a $125.1 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish contain Bob Peck and Andy Raab’s FPR Partners, Ken Griffin’s Citadel Investment Group and Michael Pausic’s Foxhaven Asset Management. In terms of the portfolio weights assigned to each position Swift Run Capital Management allocated the biggest weight to Liberty Media Corporation (NASDAQ:LSXMA), around 4.12% of its 13F portfolio. Act II Capital is also relatively very bullish on the stock, dishing out 3.68 percent of its 13F equity portfolio to LSXMA.

Due to the fact that Liberty Media Corporation (NASDAQ:LSXMA) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of fund managers that decided to sell off their positions entirely heading into Q4. It’s worth mentioning that Noah Levy and Eugene Dozortsev’s Newtyn Management said goodbye to the biggest position of all the hedgies tracked by Insider Monkey, totaling close to $34.1 million in stock, and Doug Silverman and Alexander Klabin’s Senator Investment Group was right behind this move, as the fund dumped about $30.7 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Liberty Media Corporation (NASDAQ:LSXMA). These stocks are Loews Corporation (NYSE:L), W.P. Carey Inc. REIT (NYSE:WPC), Ventas, Inc. (NYSE:VTR), and Godaddy Inc (NYSE:GDDY). 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
L 21 107581 -3
WPC 22 33963 1
VTR 25 337381 -4
GDDY 54 2247882 3
Average 30.5 681702 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $682 million. That figure was $1088 million in LSXMA’s case. Godaddy Inc (NYSE:GDDY) is the most popular stock in this table. On the other hand Loews Corporation (NYSE:L) is the least popular one with only 21 bullish hedge fund positions. Liberty Media Corporation (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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but beat the market by 15.6 percentage points. Unfortunately LSXMA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on LSXMA were disappointed as the stock returned 4.2% during the same time 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 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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