Were Hedge Funds Illusioned With Las Vegas Sands Corp. (LVS)?

We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Las Vegas Sands Corp. (NYSE:LVS) and determine whether hedge funds skillfully traded this stock.

Las Vegas Sands Corp. (NYSE:LVS) was in 40 hedge funds’ portfolios at the end of September. The all time high for this statistic is 63. LVS has seen a decrease in support from the world’s most elite money managers recently. There were 48 hedge funds in our database with LVS holdings at the end of June. Our calculations also showed that LVS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s go over the latest hedge fund action surrounding Las Vegas Sands Corp. (NYSE:LVS).

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

At the end of September, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards LVS over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

More specifically, D E Shaw was the largest shareholder of Las Vegas Sands Corp. (NYSE:LVS), with a stake worth $326.1 million reported as of the end of September. Trailing D E Shaw was Citadel Investment Group, which amassed a stake valued at $188.7 million. Long Pond Capital, Long Pond Capital, and Citadel Investment Group 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 5.83% of its 13F portfolio. Long Pond Capital is also relatively very bullish on the stock, earmarking 5.74 percent of its 13F equity portfolio to LVS.

Seeing as Las Vegas Sands Corp. (NYSE:LVS) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there were a few fund managers who sold off their full holdings last quarter. At the top of the heap, Gabriel Plotkin’s Melvin Capital Management cut the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $284.5 million in call options. Gabriel Plotkin’s fund, Melvin Capital Management, also sold off its call options, about $187.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 8 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Las Vegas Sands Corp. (NYSE:LVS) but similarly valued. We will take a look at Yandex NV (NASDAQ:YNDX), Synchrony Financial (NYSE:SYF), WEC Energy Group, Inc. (NYSE:WEC), Occidental Petroleum Corporation (NYSE:OXY), Zebra Technologies Corporation (NASDAQ:ZBRA), PACCAR Inc (NASDAQ:PCAR), and Delta Air Lines, Inc. (NYSE:DAL). This group of stocks’ market caps match LVS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 38.3 hedge funds with bullish positions and the average amount invested in these stocks was $1347 million. That figure was $938 million in LVS’s case. Occidental Petroleum Corporation (NYSE:OXY) is the most popular stock in this table. On the other hand PACCAR Inc (NASDAQ:PCAR) is the least popular one with only 26 bullish hedge fund positions. Las Vegas Sands Corp. (NYSE:LVS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LVS is 36.6. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on LVS as the stock returned 19.7% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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