Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Lamar Advertising Co (LAMR) A Good Stock To Buy?

It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Lamar Advertising Co (NASDAQ:LAMR) during the quarter below.

Lamar Advertising Co (NASDAQ:LAMR) investors should be aware of an increase in activity from the world’s largest hedge funds lately. LAMR was in 22 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 19 hedge funds in our database with LAMR positions at the end of the previous quarter. Our calculations also showed that LAMR isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

MILLENNIUM MANAGEMENT

Let’s analyze the fresh hedge fund action surrounding Lamar Advertising Co (NASDAQ:LAMR).

What have hedge funds been doing with Lamar Advertising Co (NASDAQ:LAMR)?

Heading into the first quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16% from the second quarter of 2018. On the other hand, there were a total of 22 hedge funds with a bullish position in LAMR a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

LAMR

More specifically, Renaissance Technologies was the largest shareholder of Lamar Advertising Co (NASDAQ:LAMR), with a stake worth $147.7 million reported as of the end of September. Trailing Renaissance Technologies was Waratah Capital Advisors, which amassed a stake valued at $25.5 million. Millennium Management, Water Street Capital, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.

Now, some big names were leading the bulls’ herd. GLG Partners, managed by Noam Gottesman, created the most valuable position in Lamar Advertising Co (NASDAQ:LAMR). GLG Partners had $6.6 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also initiated a $1 million position during the quarter. The following funds were also among the new LAMR investors: Benjamin A. Smith’s Laurion Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lamar Advertising Co (NASDAQ:LAMR) but similarly valued. These stocks are US Foods Holding Corp. (NYSE:USFD), Apartment Investment and Management Co. (NYSE:AIV), Tallgrass Energy, LP (NYSE:TGE), and Whirlpool Corporation (NYSE:WHR). All of these stocks’ market caps resemble LAMR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
USFD 41 1206641 5
AIV 21 522693 3
TGE 8 21640 2
WHR 20 474650 -3
Average 22.5 556406 1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $556 million. That figure was $252 million in LAMR’s case. US Foods Holding Corp. (NYSE:USFD) is the most popular stock in this table. On the other hand Tallgrass Energy, LP (NYSE:TGE) is the least popular one with only 8 bullish hedge fund positions. Lamar Advertising Co (NASDAQ:LAMR) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that the top 15 most popular stocks among hedge funds returned 21.3% year-to-date through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Hedge funds were also right about betting on Lamar, though not to the same extent, as the stock returned 18.3% and outperformed the market as well.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...