Hedge Funds Are Finally Warming Up To LG Display Co Ltd. (LPL)?
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded LG Display Co Ltd. (NYSE:LPL) based on those filings.
LG Display Co Ltd. (NYSE:LPL) was in 4 hedge funds' portfolios at the end of March. LPL investors should be aware of an increase in support from the world's most elite money managers of late. There were 3 hedge funds in our database with LPL positions at the end of the previous quarter. Our calculations also showed that LPL 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_27676" align="aligncenter" width="355"]
Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's analyze the key hedge fund action regarding LG Display Co Ltd. (NYSE:LPL).
Hedge fund activity in LG Display Co Ltd. (NYSE:LPL)
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LPL over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the largest position in LG Display Co Ltd. (NYSE:LPL). Arrowstreet Capital has a $3.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which holds a $1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish comprise Renaissance Technologies, Paul Marshall and Ian Wace's Marshall Wace LLP and . In terms of the portfolio weights assigned to each position Arrowstreet Capital allocated the biggest weight to LG Display Co Ltd. (NYSE:LPL), around 0.01% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, designating 0.0023 percent of its 13F equity portfolio to LPL.
Now, key hedge funds were breaking ground themselves. Millennium Management, managed by Israel Englander, initiated the biggest position in LG Display Co Ltd. (NYSE:LPL). Millennium Management had $1 million invested in the company at the end of the quarter. Renaissance Technologies also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Paul Marshall and Ian Wace's Marshall Wace LLP.
Let's now take a look at hedge fund activity in other stocks similar to LG Display Co Ltd. (NYSE:LPL). We will take a look at Nevro Corp (NYSE:NVRO), B2Gold Corp (NYSE:BTG), Nektar Therapeutics (NASDAQ:NKTR), and Balchem Corporation (NASDAQ:BCPC). This group of stocks' market valuations are closest to LPL's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NVRO,31,694464,-2 BTG,19,228596,2 NKTR,17,198202,-9 BCPC,13,56015,1 Average,20,294319,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $294 million. That figure was $5 million in LPL's case. Nevro Corp (NYSE:NVRO) is the most popular stock in this table. On the other hand Balchem Corporation (NASDAQ:BCPC) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks LG Display Co Ltd. (NYSE:LPL) is even less popular than BCPC. Hedge funds dodged a bullet by taking a bearish stance towards LPL. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately LPL wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); LPL investors were disappointed as the stock returned -4.5% during the second quarter (through the end of May) 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 so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
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