World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Lee Enterprises, Incorporated (NYSE:LEE) was in 12 hedge funds’ portfolios at the end of the first quarter of 2019. LEE has experienced an increase in hedge fund sentiment in recent months. There were 11 hedge funds in our database with LEE holdings at the end of the previous quarter. Our calculations also showed that LEE isn’t among the 30 most popular stocks among hedge funds.
In the 21st century investor’s toolkit there are many metrics market participants employ to value publicly traded companies. A couple of the most under-the-radar metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the top fund managers can trounce the broader indices by a solid margin (see the details here).
We’re going to go over the fresh hedge fund action regarding Lee Enterprises, Incorporated (NYSE:LEE).
What does smart money think about Lee Enterprises, Incorporated (NYSE:LEE)?
At Q1’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LEE over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Lee Enterprises, Incorporated (NYSE:LEE) was held by Cannell Capital, which reported holding $9 million worth of stock at the end of March. It was followed by Graham Capital Management with a $2.2 million position. Other investors bullish on the company included Millennium Management, Prescott Group Capital Management, and Osmium Partners.
Consequently, key hedge funds have been driving this bullishness. PEAK6 Capital Management, managed by Matthew Hulsizer, assembled the biggest call position in Lee Enterprises, Incorporated (NYSE:LEE). PEAK6 Capital Management had $0.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Mark Broach’s Manatuck Hill Partners and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lee Enterprises, Incorporated (NYSE:LEE) but similarly valued. These stocks are RigNet Inc (NASDAQ:RNET), Danaos Corporation (NYSE:DAC), NL Industries, Inc. (NYSE:NL), and Allegro Merger Corp. (NASDAQ:ALGR). All of these stocks’ market caps match LEE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RNET | 4 | 14144 | -1 |
| DAC | 2 | 195 | 1 |
| NL | 3 | 1056 | 0 |
| ALGR | 11 | 30105 | 0 |
| Average | 5 | 11375 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $19 million in LEE’s case. Allegro Merger Corp. (NASDAQ:ALGR) is the most popular stock in this table. On the other hand Danaos Corporation (NYSE:DAC) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Lee Enterprises, Incorporated (NYSE:LEE) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately LEE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LEE were disappointed as the stock returned -29.4% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
