Is LSXMA Stock A Buy or Sell?
We at Insider Monkey have gone over 887 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article, we look at what those funds think of The Liberty SiriusXM Group (NASDAQ:LSXMA) based on that data.
Is LSXMA stock a buy or sell? The Liberty SiriusXM Group (NASDAQ:LSXMA) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 42 hedge funds' portfolios at the end of the fourth quarter of 2020. Our calculations also showed that LSXMA isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). 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 Carnival Corporation & plc (NYSE:CUK), Logitech International SA (NASDAQ:LOGI), and Tractor Supply Company (NASDAQ:TSCO) to gather more data points.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Seth Klarman of Baupost Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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. Now we're going to take a glance at the new hedge fund action surrounding The Liberty SiriusXM Group (NASDAQ:LSXMA).
Do Hedge Funds Think LSXMA Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LSXMA over the last 22 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Berkshire Hathaway was the largest shareholder of The Liberty SiriusXM Group (NASDAQ:LSXMA), with a stake worth $641.8 million reported as of the end of December. Trailing Berkshire Hathaway was D E Shaw, which amassed a stake valued at $196.9 million. Baupost Group, Citadel Investment Group, and FPR Partners 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 Raging Capital Management allocated the biggest weight to The Liberty SiriusXM Group (NASDAQ:LSXMA), around 21.19% of its 13F portfolio. Swift Run Capital Management is also relatively very bullish on the stock, earmarking 3.55 percent of its 13F equity portfolio to LSXMA.
Since The Liberty SiriusXM Group (NASDAQ:LSXMA) has faced falling interest from hedge fund managers, we can see that there exists a select few hedgies who sold off their entire stakes heading into Q1. Intriguingly, Mark Moore's ThornTree Capital Partners sold off the biggest stake of all the hedgies followed by Insider Monkey, totaling close to $15.9 million in stock. Steve Cohen's fund, Point72 Asset Management, also dropped its stock, about $10.7 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to The Liberty SiriusXM Group (NASDAQ:LSXMA). These stocks are Carnival Corporation & plc (NYSE:CUK), Logitech International SA (NASDAQ:LOGI), Tractor Supply Company (NASDAQ:TSCO), Sun Communities Inc (NYSE:SUI), Solaredge Technologies Inc (NASDAQ:SEDG), M&T Bank Corporation (NYSE:MTB), and Nomura Holdings, Inc. (NYSE:NMR). This group of stocks' market valuations are similar to LSXMA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CUK,7,116507,-6 LOGI,21,432791,6 TSCO,39,1179291,-9 SUI,27,600763,-4 SEDG,28,458949,-3 MTB,33,382587,-2 NMR,6,17627,0 Average,23,455502,-2.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $456 million. That figure was $1692 million in LSXMA's case. Tractor Supply Company (NASDAQ:TSCO) is the most popular stock in this table. On the other hand Nomura Holdings, Inc. (NYSE:NMR) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks The Liberty SiriusXM Group (NASDAQ:LSXMA) is more popular among hedge funds. Our overall hedge fund sentiment score for LSXMA is 80.2. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Unfortunately LSXMA wasn't nearly as popular as these 30 stocks and hedge funds that were betting on LSXMA were disappointed as the stock returned 3.9% since the end of the fourth quarter (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
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