Billionaire Steve Cohen’s SAC Has Been Buying Lamar Advertising Co (LAMR)

Page 1 of 2

Lamar Advertising (LAMR)A 13G filed with the SEC has disclosed that billionaire Steve Cohen’s SAC Capital Advisors owns 4.2 million shares of Lamar Advertising Co (NASDAQ:LAMR), giving the fund a 5.3% stake in the $4.1 billion market cap outdoor advertising company with a primary focus on billboard advertising. We track SAC’s quarterly 13F filings alongside those of hundreds of other hedge funds as part of our work developing investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year). According to our database, the fund owned 1.8 million shares at the beginning of April (see Cohen’s stock picks over time). Southeastern Asset Management, a mutual fund managed by billionaire Mason Hawkins, reported a position of 4.4 million shares in its 13F for the first quarter of 2013 (find Southeastern’s favorite stocks).

Last quarter Lamar Advertising Co (NASDAQ:LAMR)’s revenues rose 6% compared to the first quarter of 2012, though operating income showed very little change as SGA expenses picked up considerably. Net losses were a little over $6 million, with Q1 generally being poor for Lamar. Trailing earnings are currently very low compared to the company’s market capitalization, and even with Wall Street analysts expecting a large increase in earnings per share over the next year and a half the forward P/E is 45.

Steven CohenThe buy case for Lamar Advertising Co (NASDAQ:LAMR) for some time, however, has been the possibility of the company converting to a real estate investment trust. Real estate investment trusts receive favorable tax treatment conditional on distributing a large share of their taxable income to shareholders; as such , the conversion process is more tax efficient and generally also commits companies to pay a decent dividend yield (a factor which is in high demand in the current low interest rate environment). As it happens, an 8-K filed on June 6th by Iron Mountain revealed that the IRS may revise its working definition of “real estate” for the REIT approval process, a move which may signal that the agency will get tougher on prospective applicants such as Lamar seeking to take advantage of REITs’ favorable tax status. The stock price was down 4% as of this writing.

Lamar Advertising Co (NASDAQ:LAMR)’s closest peer is Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), which manages billboards, street furniture displays, and transit advertising displays. This company is actually unprofitable on a trailing basis, with the sell-side expecting net losses this year as well. With revenue flat in the first quarter of 2013 versus a year earlier, we would avoid the stock.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

7 Free Ways to Advertise Your Business Online

The 18 Best R&B Songs of the 90’s

The 10 Most Dangerous States to be a Cop

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!