Is LAMR Stock A Buy or Sell?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Lamar Advertising Company (NASDAQ:LAMR).

Is LAMR stock a buy? Lamar Advertising Company (NASDAQ:LAMR) was in 36 hedge funds’ portfolios at the end of December. The all time high for this statistic is 44. LAMR investors should pay attention to a decrease in support from the world’s most elite money managers recently. There were 37 hedge funds in our database with LAMR holdings at the end of September. Our calculations also showed that LAMR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

James Dinan of York Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 website. Now we’re going to take a gander at the key hedge fund action encompassing Lamar Advertising Company (NASDAQ:LAMR).

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

Heading into the first quarter of 2021, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the third quarter of 2020. On the other hand, there were a total of 28 hedge funds with a bullish position in LAMR a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

More specifically, Fir Tree was the largest shareholder of Lamar Advertising Company (NASDAQ:LAMR), with a stake worth $76.9 million reported as of the end of December. Trailing Fir Tree was Select Equity Group, which amassed a stake valued at $74 million. Citadel Investment Group, Falcon Edge Capital, and EMS 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 10.78% of its 13F portfolio. Falcon Edge Capital is also relatively very bullish on the stock, dishing out 3.83 percent of its 13F equity portfolio to LAMR.

Seeing as Lamar Advertising Company (NASDAQ:LAMR) has witnessed a decline in interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that elected to cut their full holdings heading into Q1. It’s worth mentioning that Josh Resnick’s Jericho Capital Asset Management sold off the largest stake of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $28.2 million in stock. Seth Wunder’s fund, Black-and-White Capital, also cut its stock, about $9.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q1.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Lamar Advertising Company (NASDAQ:LAMR) but similarly valued. We will take a look at Inphi Corporation (NYSE:IPHI), Carlisle Companies, Inc. (NYSE:CSL), Gentex Corporation (NASDAQ:GNTX), Arch Coal Inc (NYSE:ACI), SEI Investments Company (NASDAQ:SEIC), Sensata Technologies Holding plc (NYSE:ST), and MKS Instruments, Inc. (NASDAQ:MKSI). All of these stocks’ market caps resemble LAMR’s market cap.

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As you can see these stocks had an average of 28.7 hedge funds with bullish positions and the average amount invested in these stocks was $1030 million. That figure was $528 million in LAMR’s case. Gentex Corporation (NASDAQ:GNTX) is the most popular stock in this table. On the other hand Carlisle Companies, Inc. (NYSE:CSL) is the least popular one with only 17 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 78.5. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on LAMR as the stock returned 15.3% since the end of Q4 (through 4/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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