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Hedge Funds Are Buying Lakeland Industries, Inc. (LAKE)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Lakeland Industries, Inc. (NASDAQ:LAKE) based on that data.

Lakeland Industries, Inc. (NASDAQ:LAKE) was in 9 hedge funds’ portfolios at the end of the first quarter of 2020. LAKE has seen an increase in activity from the world’s largest hedge funds lately. There were 4 hedge funds in our database with LAKE holdings at the end of the previous quarter. Our calculations also showed that LAKE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Rogers Ariel Investments

John Rogers of Ariel Investments

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s analyze the new hedge fund action encompassing Lakeland Industries, Inc. (NASDAQ:LAKE).

What have hedge funds been doing with Lakeland Industries, Inc. (NASDAQ:LAKE)?

Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 125% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in LAKE a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is LAKE A Good Stock To Buy?

The largest stake in Lakeland Industries, Inc. (NASDAQ:LAKE) was held by Renaissance Technologies, which reported holding $9.9 million worth of stock at the end of September. It was followed by Balyasny Asset Management with a $2.2 million position. Other investors bullish on the company included Ariel Investments, Shellback Capital, and Ancora Advisors. In terms of the portfolio weights assigned to each position Shellback Capital allocated the biggest weight to Lakeland Industries, Inc. (NASDAQ:LAKE), around 0.33% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, setting aside 0.1 percent of its 13F equity portfolio to LAKE.

As one would reasonably expect, specific money managers have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in Lakeland Industries, Inc. (NASDAQ:LAKE). Balyasny Asset Management had $2.2 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital also made a $1.5 million investment in the stock during the quarter. The following funds were also among the new LAKE investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Michael Gelband’s ExodusPoint Capital, and Ken Griffin’s Citadel Investment Group.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Lakeland Industries, Inc. (NASDAQ:LAKE) but similarly valued. We will take a look at Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK), Safe Bulkers, Inc. (NYSE:SB), Lineage Cell Therapeutics, Inc. (NYSE:LCTX), and Oil States International, Inc. (NYSE:OIS). This group of stocks’ market caps resemble LAKE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PEBK 2 5139 0
SB 6 6525 -1
LCTX 6 28804 1
OIS 12 4777 -1
Average 6.5 11311 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $18 million in LAKE’s case. Oil States International, Inc. (NYSE:OIS) is the most popular stock in this table. On the other hand Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK) is the least popular one with only 2 bullish hedge fund positions. Lakeland Industries, Inc. (NASDAQ:LAKE) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on LAKE as the stock returned 33.4% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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