Is LyondellBasell Industries NV (NYSE:LYB) the right pick for your portfolio? The number of bullish hedge fund bets stayed the same last quarter, which is a slightly negative development in our experience.
In the financial world, there are plenty of gauges market participants can use to watch Mr. Market. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the S&P 500 by a superb amount (see just how much).
Just as important, optimistic insider trading activity is a second way to parse down the investments you’re interested in. As the old adage goes: there are lots of reasons for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this strategy if piggybackers know what to do (learn more here).
Consequently, we’re going to take a gander at the key action regarding LyondellBasell Industries NV (NYSE:LYB).
How are hedge funds trading LyondellBasell Industries NV (NYSE:LYB)?
At the end of the first quarter, a total of 64 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Andreas Halvorsen’s Viking Global had the most valuable position in LyondellBasell Industries NV (NYSE:LYB), worth close to $830.4 million, accounting for 5% of its total 13F portfolio. Coming in second is Discovery Capital Management, managed by Rob Citrone, which held a $356.6 million position; 4.8% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Cliff Asness’s AQR Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw.
Since LyondellBasell Industries NV (NYSE:LYB) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedgies who sold off their full holdings heading into Q2. Interestingly, Nick Niell’s Arrowgrass Capital Partners cut the largest stake of the “upper crust” of funds we watch, worth an estimated $35.1 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund said goodbye to about $32.9 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with LyondellBasell Industries NV (NYSE:LYB)?
Insider buying is best served when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time frame, LyondellBasell Industries NV (NYSE:LYB) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to LyondellBasell Industries NV (NYSE:LYB). These stocks are Westlake Chemical Corporation (NYSE:WLK), Sigma-Aldrich Corporation (NASDAQ:SIAL), Sherwin-Williams Company (NYSE:SHW), PPG Industries, Inc. (NYSE:PPG), and Williams Partners L.P. (NYSE:WPZ). This group of stocks are the members of the specialty chemicals industry and their market caps are closest to LYB’s market cap.