Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Lamar Advertising Company (NASDAQ:LAMR).
Is Lamar Advertising Company (NASDAQ:LAMR) a cheap stock to buy now? The smart money was selling. The number of bullish hedge fund bets fell by 2 in recent months. Lamar Advertising Company (NASDAQ:LAMR) was in 30 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 44. Our calculations also showed that LAMR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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 take a peek at the key hedge fund action surrounding Lamar Advertising Company (NASDAQ:LAMR).
Richard Gerson of Falcon Edge Capital
Do Hedge Funds Think LAMR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LAMR over the last 25 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, 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, earmarking 2.59 percent of its 13F equity portfolio to LAMR.
Judging by the fact that Lamar Advertising Company (NASDAQ:LAMR) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few fund managers that decided to sell off their entire stakes by the end of the third quarter. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management cut the largest stake of all the hedgies followed by Insider Monkey, worth about $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 sold off about $2.6 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lamar Advertising Company (NASDAQ:LAMR) but similarly valued. These stocks are Natura &Co Holding S.A. (NYSE:NTCO), C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), Regency Centers Corp (NASDAQ:REG), Cna Financial Corporation (NYSE:CNA), Penn National Gaming, Inc (NASDAQ:PENN), Western Alliance Bancorporation (NYSE:WAL), and Essential Utilities Inc (NYSE:WTRG). This group of stocks’ market caps resemble 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 28.6% in 2021 through November 30th and beat the market again by 5.6 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 -3.7% since the end of September (through 11/30) 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.
Follow Lamar Advertising Cow (NASDAQ:LAMR)
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Disclosure: None. This article was originally published at Insider Monkey.
