Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Lamar Advertising Company (NASDAQ:LAMR) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Lamar Advertising Company (NASDAQ:LAMR) has experienced a decrease in enthusiasm from smart money recently. Lamar Advertising Company (NASDAQ:LAMR) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 44. There were 32 hedge funds in our database with LAMR holdings at the end of June. Our calculations also showed that LAMR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Peter Algert of Algert Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to go over the new hedge fund action regarding Lamar Advertising Company (NASDAQ:LAMR).
Do Hedge Funds Think LAMR Is A Good Stock To Buy Now?
At Q3’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the second quarter of 2021. By comparison, 37 hedge funds held shares or bullish call options in LAMR a year ago. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Jericho Capital Asset Management was the largest shareholder of Lamar Advertising Company (NASDAQ:LAMR), with a stake worth $92.8 million reported as of the end of September. Trailing Jericho Capital Asset Management was Waratah Capital Advisors, which amassed a stake valued at $71.9 million. Select Equity Group, Millennium Management, and Falcon Edge 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 LFL Advisers allocated the biggest weight to Lamar Advertising Company (NASDAQ:LAMR), around 13.78% of its 13F portfolio. Falcon Edge Capital is also relatively very bullish on the stock, setting aside 2.59 percent of its 13F equity portfolio to LAMR.
Since Lamar Advertising Company (NASDAQ:LAMR) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedgies that elected to cut their full holdings last quarter. It’s worth mentioning that Matthew Hulsizer’s PEAK6 Capital Management dropped the biggest position of all the hedgies watched by Insider Monkey, comprising close to $6.4 million in call options, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) was right behind this move, as the fund said goodbye to about $2.6 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Lamar Advertising Company (NASDAQ:LAMR). These stocks are Natura &Co Holding S.A. (NYSE:NTCO), C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), Regency Centers Corp (NYSE:REG), Cna Financial Corporation (NYSE:CNA), Penn National Gaming, Inc (NASDAQ:PENN), Western Alliance Bancorporation (NYSE:WAL), and Essential Utilities Inc (NYSE:WTRG). All of these stocks’ market caps are closest to LAMR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTCO | 6 | 46852 | 1 |
| CHRW | 20 | 287994 | -11 |
| REG | 19 | 158467 | -6 |
| CNA | 12 | 63809 | -1 |
| PENN | 38 | 1080780 | -2 |
| WAL | 29 | 291818 | 1 |
| WTRG | 19 | 435811 | 6 |
| Average | 20.4 | 337933 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $338 million. That figure was $445 million in LAMR’s case. Penn National Gaming, Inc (NASDAQ:PENN) is the most popular stock in this table. On the other hand Natura &Co Holding S.A. (NYSE:NTCO) is the least popular one with only 6 bullish hedge fund positions. Lamar Advertising Company (NASDAQ:LAMR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LAMR is 61. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, LAMR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LAMR were disappointed as the stock returned -2.4% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Lamar Advertising Cow (NASDAQ:LAMR)
Follow Lamar Advertising Cow (NASDAQ:LAMR)
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Disclosure: None. This article was originally published at Insider Monkey.
