The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of La-Z-Boy Incorporated (NYSE:LZB).
Hedge fund interest in La-Z-Boy Incorporated (NYSE:LZB) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Lakeland Financial Corporation (NASDAQ:LKFN), Sally Beauty Holdings, Inc. (NYSE:SBH), and Bank of N.T. Butterfield & Son Limited (The) (NYSE:NTB) to gather more data points. Our calculations also showed that LZB 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.
At the moment there are a large number of methods investors have at their disposal to size up their holdings. Two of the most under-the-radar methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can beat the market by a very impressive margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to analyze the fresh hedge fund action encompassing La-Z-Boy Incorporated (NYSE:LZB).
What does smart money think about La-Z-Boy Incorporated (NYSE:LZB)?
At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in LZB 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.
The largest stake in La-Z-Boy Incorporated (NYSE:LZB) was held by GAMCO Investors, which reported holding $7.3 million worth of stock at the end of September. It was followed by Royce & Associates with a $7.2 million position. Other investors bullish on the company included D E Shaw, Maverick Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Quantinno Capital allocated the biggest weight to La-Z-Boy Incorporated (NYSE:LZB), around 0.13% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.1 percent of its 13F equity portfolio to LZB.
Seeing as La-Z-Boy Incorporated (NYSE:LZB) has witnessed bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of funds that slashed their entire stakes heading into Q4. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest investment of the 750 funds watched by Insider Monkey, comprising close to $8 million in stock. Philippe Laffont’s fund, Coatue Management, also dropped its stock, about $1.2 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as La-Z-Boy Incorporated (NYSE:LZB) but similarly valued. These stocks are Lakeland Financial Corporation (NASDAQ:LKFN), Sally Beauty Holdings, Inc. (NYSE:SBH), Bank of N.T. Butterfield & Son Limited (The) (NYSE:NTB), and Supernus Pharmaceuticals Inc (NASDAQ:SUPN). This group of stocks’ market valuations are closest to LZB’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $40 million in LZB’s case. Supernus Pharmaceuticals Inc (NASDAQ:SUPN) is the most popular stock in this table. On the other hand Lakeland Financial Corporation (NASDAQ:LKFN) is the least popular one with only 9 bullish hedge fund positions. La-Z-Boy Incorporated (NYSE:LZB) 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 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on LZB as the stock returned 38.1% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.