The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Las Vegas Sands Corp. (NYSE:LVS).
Hedge fund interest in Las Vegas Sands Corp. (NYSE:LVS) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Metlife Inc (NYSE:MET), BCE Inc. (NYSE:BCE), and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) to gather more data points. Our calculations also showed that LVS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
[caption id="attachment_745223" align="aligncenter" width="1613"] Daniel Sundheim of D1 Capital Partners[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to view the new hedge fund action regarding Las Vegas Sands Corp. (NYSE:LVS).
How have hedgies been trading Las Vegas Sands Corp. (NYSE:LVS)?
At the end of the third quarter, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2019. On the other hand, there were a total of 38 hedge funds with a bullish position in LVS a year ago. So, let's check out 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, Melvin Capital Management, managed by Gabriel Plotkin, holds the biggest position in Las Vegas Sands Corp. (NYSE:LVS). Melvin Capital Management has a $376.5 million position in the stock, comprising 3% of its 13F portfolio. The second most bullish fund manager is Israel Englander of Millennium Management, with a $264.6 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish include Daniel Sundheim's D1 Capital Partners, Renaissance Technologies and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Springowl Associates allocated the biggest weight to Las Vegas Sands Corp. (NYSE:LVS), around 4.78% of its portfolio. LMR Partners is also relatively very bullish on the stock, earmarking 3.26 percent of its 13F equity portfolio to LVS.
Due to the fact that Las Vegas Sands Corp. (NYSE:LVS) has witnessed bearish sentiment from hedge fund managers, logic holds that there were a few money managers that decided to sell off their positions entirely in the third quarter. At the top of the heap, Steve Cohen's Point72 Asset Management sold off the largest investment of all the hedgies followed by Insider Monkey, worth an estimated $34.3 million in stock. Louis Bacon's fund, Moore Global Investments, also said goodbye to its stock, about $14.8 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Las Vegas Sands Corp. (NYSE:LVS) but similarly valued. We will take a look at Metlife Inc (NYSE:MET), BCE Inc. (NYSE:BCE), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), and Tesla Inc. (NASDAQ:TSLA). This group of stocks' market valuations are closest to LVS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MET,35,2050364,9 BCE,13,415810,-1 VRTX,46,2296101,6 TSLA,28,570594,-9 Average,30.5,1333217,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $1333 million. That figure was $1983 million in LVS's case. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 13 bullish hedge fund positions. Las Vegas Sands Corp. (NYSE:LVS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on LVS, though not to the same extent, as the stock returned 8.6% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.