Hedge Funds Are Buying Liberty Global plc (LBTYA)

·5 min read

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money 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 (like Melvin Capital's recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Liberty Global plc (NASDAQ:LBTYA).

Liberty Global plc (NASDAQ:LBTYA) has seen an increase in hedge fund interest recently. Liberty Global plc (NASDAQ:LBTYA) was in 34 hedge funds' portfolios at the end of September. The all time high for this statistic is 64. There were 30 hedge funds in our database with LBTYA positions at the end of the second quarter. Our calculations also showed that LBTYA isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Seth Klarman of Baupost Group
Seth Klarman of Baupost Group

Seth Klarman of Baupost Group

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. With all of this in mind we're going to go over the key hedge fund action encompassing Liberty Global plc (NASDAQ:LBTYA).

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

Heading into the fourth quarter of 2021, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LBTYA over the last 25 quarters. With hedgies' capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

Is LBTYA A Good Stock To Buy?
Is LBTYA A Good Stock To Buy?

More specifically, Baupost Group was the largest shareholder of Liberty Global plc (NASDAQ:LBTYA), with a stake worth $228.2 million reported as of the end of September. Trailing Baupost Group was Renaissance Technologies, which amassed a stake valued at $102.9 million. Arrowstreet Capital, Route One Investment Company, and Holocene Advisors 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 Lion Point allocated the biggest weight to Liberty Global plc (NASDAQ:LBTYA), around 6.98% of its 13F portfolio. Steel Canyon Capital is also relatively very bullish on the stock, earmarking 2.6 percent of its 13F equity portfolio to LBTYA.

Consequently, some big names were leading the bulls' herd. Holocene Advisors, managed by Brandon Haley, established the most valuable position in Liberty Global plc (NASDAQ:LBTYA). Holocene Advisors had $51 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also initiated a $9 million position during the quarter. The following funds were also among the new LBTYA investors: Daniel Gold's QVT Financial, Israel Englander's Millennium Management, and Bruce Kovner's Caxton Associates LP.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Liberty Global plc (NASDAQ:LBTYA) but similarly valued. These stocks are Signature Bank (NASDAQ:SBNY), PPD, Inc. (NASDAQ:PPD), EXACT Sciences Corporation (NASDAQ:EXAS), Markel Corporation (NYSE:MKL), Viatris Inc. (NASDAQ:VTRS), Westinghouse Air Brake Technologies Corporation (NYSE:WAB), and Conagra Brands, Inc. (NYSE:CAG). This group of stocks' market caps are closest to LBTYA's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBNY,46,950619,3 PPD,37,1890261,0 EXAS,40,1984372,5 MKL,25,689937,-8 VTRS,55,1466403,2 WAB,38,2982164,-8 CAG,20,625323,-9 Average,37.3,1512726,-2.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.3 hedge funds with bullish positions and the average amount invested in these stocks was $1513 million. That figure was $791 million in LBTYA's case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Conagra Brands, Inc. (NYSE:CAG) is the least popular one with only 20 bullish hedge fund positions. Liberty Global plc (NASDAQ:LBTYA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LBTYA is 44.9. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately LBTYA wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); LBTYA investors were disappointed as the stock returned -11.4% since the end of September (through 11/30) 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 in 2021.

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

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