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Is LyondellBasell Industries NV (LYB) Going to Burn These Hedge Funds?

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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million 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. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded LyondellBasell Industries NV (NYSE:LYB) based on those filings.

Is LyondellBasell Industries NV (NYSE:LYB) a buy here? Prominent investors were betting on the stock. The number of long hedge fund positions rose by 20 lately. LyondellBasell Industries NV (NYSE:LYB) was in 47 hedge funds' portfolios at the end of March. The all time high for this statistic is 57. Our calculations also showed that LYB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

At the moment there are numerous gauges stock market investors use to size up publicly traded companies. A couple of the most underrated gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can beat the broader indices by a very impressive amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .


Boykin Curry of Eagle Capital

At Insider Monkey we leave no stone unturned when looking for 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, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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 homepage. Now let's check out the new hedge fund action surrounding LyondellBasell Industries NV (NYSE:LYB).

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

At Q1's end, a total of 47 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 74% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards LYB over the last 23 quarters. With hedgies' capital changing hands, there exists a few notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

Among these funds, Eagle Capital Management held the most valuable stake in LyondellBasell Industries NV (NYSE:LYB), which was worth $308.5 million at the end of the fourth quarter. On the second spot was Holocene Advisors which amassed $74.1 million worth of shares. Platinum Asset Management, Citadel Investment Group, and Samlyn Capital 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 Appian Way Asset Management allocated the biggest weight to LyondellBasell Industries NV (NYSE:LYB), around 4.58% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, setting aside 2.68 percent of its 13F equity portfolio to LYB.

Now, key hedge funds have jumped into LyondellBasell Industries NV (NYSE:LYB) headfirst. Holocene Advisors, managed by Brandon Haley, created the most valuable position in LyondellBasell Industries NV (NYSE:LYB). Holocene Advisors had $74.1 million invested in the company at the end of the quarter. Robert Pohly's Samlyn Capital also initiated a $55.2 million position during the quarter. The other funds with new positions in the stock are Robert Bishop's Impala Asset Management, Vince Maddi and Shawn Brennan's SIR Capital Management, and D. E. Shaw's D E Shaw.

Let's also examine hedge fund activity in other stocks similar to LyondellBasell Industries NV (NYSE:LYB). We will take a look at International Flavors & Fragrances Inc (NYSE:IFF), Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), STMicroelectronics N.V. (NYSE:STM), MSCI Inc (NYSE:MSCI), Wipro Limited (NYSE:WIT), DexCom, Inc. (NASDAQ:DXCM), and Corteva, Inc. (NYSE:CTVA). This group of stocks' market values are similar to LYB's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IFF,55,3602931,22 BBVA,7,211912,-2 STM,15,276813,-2 MSCI,38,739290,-3 WIT,13,130610,2 DXCM,56,1678195,4 CTVA,35,1503114,-3 Average,31.3,1163266,2.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $1163 million. That figure was $892 million in LYB's case. DexCom, Inc. (NASDAQ:DXCM) is the most popular stock in this table. On the other hand Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) is the least popular one with only 7 bullish hedge fund positions. LyondellBasell Industries NV (NYSE:LYB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LYB is 75.6. 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 positive signal but 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately LYB wasn't nearly as popular as these 5 stocks and hedge funds that were betting on LYB were disappointed as the stock returned -2.6% since the end of March (through 6/18) 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 many of these stocks already outperformed the market since 2019.

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