The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Lee Enterprises, Incorporated (NYSE:LEE).
Is LEE a good stock to buy now? Investors who are in the know were becoming less hopeful. The number of bullish hedge fund positions shrunk by 6 in recent months. Lee Enterprises, Incorporated (NYSE:LEE) was in 9 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. Our calculations also showed that LEE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 15 hedge funds in our database with LEE positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are dozens of signals stock market investors can use to appraise publicly traded companies. A couple of the best signals are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform the S&P 500 by a superb amount (see the details here).
Leon Cooperman of Omega Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Keeping this in mind we’re going to check out the recent hedge fund action surrounding Lee Enterprises, Incorporated (NYSE:LEE).
Do Hedge Funds Think LEE Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -40% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in LEE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, J. Carlo Cannell’s Cannell Capital has the biggest position in Lee Enterprises, Incorporated (NYSE:LEE), worth close to $3.8 million, accounting for 1.4% of its total 13F portfolio. The second largest stake is held by Alden Global Capital, led by Randall Smith, holding a $3.4 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Frederick Tucker Golden’s Solas Capital Management, Leon Cooperman’s Omega Advisors and Matthew Hulsizer’s PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Solas Capital Management allocated the biggest weight to Lee Enterprises, Incorporated (NYSE:LEE), around 2.29% of its 13F portfolio. Cannell Capital is also relatively very bullish on the stock, setting aside 1.4 percent of its 13F equity portfolio to LEE.
Because Lee Enterprises, Incorporated (NYSE:LEE) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few fund managers who sold off their entire stakes heading into Q4. It’s worth mentioning that Israel Englander’s Millennium Management dropped the largest investment of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $0 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dumped about $0 million worth. These transactions are important to note, as total hedge fund interest fell by 6 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Lee Enterprises, Incorporated (NYSE:LEE) but similarly valued. These stocks are Medley Capital Corp (NYSE:MCC), Cumberland Pharmaceuticals, Inc. (NASDAQ:CPIX), Trinity Biotech plc (NASDAQ:TRIB), Neovasc Inc. (NASDAQ:NVCN), Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP), Broadwind Inc. (NASDAQ:BWEN), and IZEA Worldwide Inc. (NASDAQ:IZEA). This group of stocks’ market caps resemble LEE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MCC | 1 | 892 | -4 |
| CPIX | 3 | 6329 | 0 |
| TRIB | 3 | 3526 | -2 |
| NVCN | 5 | 4806 | 1 |
| USAP | 7 | 9992 | 1 |
| BWEN | 7 | 5334 | 3 |
| IZEA | 1 | 22 | 0 |
| Average | 3.9 | 4414 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.9 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $11 million in LEE’s case. Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) is the most popular stock in this table. On the other hand Medley Capital Corp (NYSE:MCC) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Lee Enterprises, Incorporated (NYSE:LEE) is more popular among hedge funds. Our overall hedge fund sentiment score for LEE is 67. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on LEE as the stock returned 32.1% since the end of September (through 12/8) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
