Were Hedge Funds Right About Las Vegas Sands Corp. (LVS)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtLas Vegas Sands Corp. (NYSE:LVS) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

Is Las Vegas Sands Corp. (NYSE:LVS) a sound investment right now? The best stock pickers were buying. The number of bullish hedge fund bets inched up by 5 in recent months. Our calculations also showed that LVS 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). LVS was in 42 hedge funds’ portfolios at the end of March. There were 37 hedge funds in our database with LVS holdings at the end of the previous quarter.

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

Today there are a large number of gauges investors can use to value stocks. A couple of the most underrated gauges are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite investment managers can beat the broader indices by a very impressive amount (see the details here).

Daniel Sundheim D1 Capital

Daniel Sundheim of D1 Capital Partners

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, this trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost gold prices. So, we are checking out this junior gold mining stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to review the latest hedge fund action regarding Las Vegas Sands Corp. (NYSE:LVS).

What does smart money think about Las Vegas Sands Corp. (NYSE:LVS)?

Heading into the second quarter of 2020, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards LVS over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

More specifically, D1 Capital Partners was the largest shareholder of Las Vegas Sands Corp. (NYSE:LVS), with a stake worth $354 million reported as of the end of September. Trailing D1 Capital Partners was Melvin Capital Management, which amassed a stake valued at $316.1 million. Point72 Asset Management, Viking Global, 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 Cumberland Associates / Springowl Associates allocated the biggest weight to Las Vegas Sands Corp. (NYSE:LVS), around 5.85% of its 13F portfolio. Columbus Hill Capital Management is also relatively very bullish on the stock, setting aside 5 percent of its 13F equity portfolio to LVS.

As aggregate interest increased, key hedge funds have been driving this bullishness. Viking Global, managed by Andreas Halvorsen, initiated the most outsized position in Las Vegas Sands Corp. (NYSE:LVS). Viking Global had $131.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $8.2 million investment in the stock during the quarter. The other funds with brand new LVS positions are Stanley Druckenmiller’s Duquesne Capital, Randall Smith’s Alden Global Capital, and Greg Eisner’s Engineers Gate Manager.

Let’s now take a look at hedge fund activity in other stocks similar to Las Vegas Sands Corp. (NYSE:LVS). We will take a look at Prudential Public Limited Company (NYSE:PUK), Bank of Montreal (NYSE:BMO), Enterprise Products Partners L.P. (NYSE:EPD), and Orange SA (NYSE:ORAN). This group of stocks’ market valuations match LVS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PUK 6 43832 0
BMO 13 150563 0
EPD 26 215411 -2
ORAN 5 12940 3
Average 12.5 105687 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $1186 million in LVS’s case. Enterprise Products Partners L.P. (NYSE:EPD) is the most popular stock in this table. On the other hand Orange SA (NYSE:ORAN) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Las Vegas Sands Corp. (NYSE:LVS) is more popular among hedge funds. 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 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. Unfortunately LVS wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on LVS were disappointed as the stock returned 7.2% during the second quarter 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 most of these stocks already outperformed the market in 2020.

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