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At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Golar LNG Limited (NASDAQ:GLNG) makes for a good investment right now.
Is GLNG a good stock to buy now? Golar LNG Limited (NASDAQ:GLNG) investors should be aware of an increase in hedge fund sentiment in recent months. Golar LNG Limited (NASDAQ:GLNG) was in 22 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 39. Our calculations also showed that GLNG isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
In the 21st century investor’s toolkit there are dozens of metrics investors can use to value publicly traded companies. Some of the most useful metrics are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can trounce the market by a healthy margin (see the details here).
Christian Leone of Luxor Capital Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, 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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let's take a look at the fresh hedge fund action encompassing Golar LNG Limited (NASDAQ:GLNG).
Do Hedge Funds Think GLNG Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GLNG over the last 21 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Orbis Investment Management, managed by William B. Gray, holds the most valuable position in Golar LNG Limited (NASDAQ:GLNG). Orbis Investment Management has a $65.7 million position in the stock, comprising 0.5% of its 13F portfolio. On Orbis Investment Management's heels is Christian Leone of Luxor Capital Group, with a $28.5 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions contain Louis Bacon's Moore Global Investments, Joe Huber's Huber Capital Management and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position Huber Capital Management allocated the biggest weight to Golar LNG Limited (NASDAQ:GLNG), around 3.13% of its 13F portfolio. Newtyn Management is also relatively very bullish on the stock, setting aside 1.1 percent of its 13F equity portfolio to GLNG.
Now, some big names were leading the bulls' herd. Encompass Capital Advisors, managed by Todd J. Kantor, initiated the most outsized position in Golar LNG Limited (NASDAQ:GLNG). Encompass Capital Advisors had $5.2 million invested in the company at the end of the quarter. Noah Levy and Eugene Dozortsev's Newtyn Management also initiated a $4.5 million position during the quarter. The other funds with brand new GLNG positions are Steve Cohen's Point72 Asset Management, John A. Levin's Levin Capital Strategies, and Wayne Cooperman's Cobalt Capital Management.
Let's now review hedge fund activity in other stocks similar to Golar LNG Limited (NASDAQ:GLNG). We will take a look at Seacor Holdings, Inc. (NYSE:CKH), Republic Bancorp, Inc. (NASDAQ:RBCAA), Groupon Inc (NASDAQ:GRPN), SpartanNash Company (NASDAQ:SPTN), Ambac Financial Group, Inc. (NYSE:AMBC), HomeStreet Inc (NASDAQ:HMST), and Qutoutiao Inc. (NASDAQ:QTT). All of these stocks' market caps match GLNG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CKH,10,86903,2 RBCAA,4,5485,-1 GRPN,16,136870,-3 SPTN,12,41184,-3 AMBC,15,61070,-1 HMST,11,34030,-2 QTT,5,1760,0 Average,10.4,52472,-1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.4 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $151 million in GLNG's case. Groupon Inc (NASDAQ:GRPN) is the most popular stock in this table. On the other hand Republic Bancorp, Inc. (NASDAQ:RBCAA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Golar LNG Limited (NASDAQ:GLNG) is more popular among hedge funds. Our overall hedge fund sentiment score for GLNG is 76.9. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on GLNG as the stock returned 54.6% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.