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"October lived up to its scary reputation—the S&P 500 falling in the month by the largest amount in the last 40 years, the only worse Octobers being '08 and the Crash of '87. For perspective, there have been only 5 occasions in those 40 years when the S&P 500 declined by greater than 20% from peak to trough. Other than the '87 Crash, all were during recessions. There were 17 other instances, over the same time frame, when the market fell by over 10% but less than 20%. Furthermore, this is the 18th correction of 5% or more since the current bull market started in March '09. Corrections are the norm. They can be healthy as they often undo market complacency—overbought levels—potentially allowing the market to base and move even higher." This is how Trapeze Asset Management summarized the recent market moves in its investor letter. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards one of the stocks hedge funds invest in.
L Brands Inc (NYSE:LB) has seen an increase in support from the world's most elite money managers recently. LB was in 35 hedge funds' portfolios at the end of December. There were 27 hedge funds in our database with LB holdings at the end of the previous quarter. Our calculations also showed that LB isn't among the 30 most popular stocks among hedge funds.
In today’s marketplace there are a multitude of metrics stock market investors put to use to appraise publicly traded companies. A pair of the most under-the-radar metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform their index-focused peers by a solid margin (see the details here).
Let's take a gander at the fresh hedge fund action regarding L Brands Inc (NYSE:LB).
What does the smart money think about L Brands Inc (NYSE:LB)?
At Q4's end, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in LB a year ago. With the smart money's capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Among these funds, Makaira Partners held the most valuable stake in L Brands Inc (NYSE:LB), which was worth $95.7 million at the end of the third quarter. On the second spot was SRS Investment Management which amassed $80.6 million worth of shares. Moreover, Citadel Investment Group, Point72 Asset Management, and Alyeska Investment Group were also bullish on L Brands Inc (NYSE:LB), allocating a large percentage of their portfolios to this stock.