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Is Lands’ End, Inc. (LE) A Good Stock To Buy?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is Lands’ End, Inc. (NASDAQ:LE) undervalued? The smart money is becoming hopeful. The number of bullish hedge fund positions went up by 1 lately. Our calculations also showed that LE isn’t among the 30 most popular stocks among hedge funds. LE was in 14 hedge funds’ portfolios at the end of the first quarter of 2019. There were 13 hedge funds in our database with LE positions at the end of the previous quarter.

In today’s marketplace there are tons of tools investors put to use to assess their stock investments. A couple of the less utilized tools are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce their index-focused peers by a significant margin (see the details here).

ESL INVESTMENTS

We’re going to take a look at the fresh hedge fund action surrounding Lands’ End, Inc. (NASDAQ:LE).

How have hedgies been trading Lands’ End, Inc. (NASDAQ:LE)?

At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LE over the last 15 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

LE_jun2019

More specifically, ESL Investments was the largest shareholder of Lands’ End, Inc. (NASDAQ:LE), with a stake worth $93.8 million reported as of the end of March. Trailing ESL Investments was AQR Capital Management, which amassed a stake valued at $3.5 million. Renaissance Technologies, Citadel Investment Group, and GAMCO Investors were also very fond of the stock, giving the stock large weights in their portfolios.

Now, some big names have jumped into Lands’ End, Inc. (NASDAQ:LE) headfirst. PEAK6 Capital Management, managed by Matthew Hulsizer, assembled the most valuable call position in Lands’ End, Inc. (NASDAQ:LE). PEAK6 Capital Management had $1.1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s go over hedge fund activity in other stocks similar to Lands’ End, Inc. (NASDAQ:LE). We will take a look at Koppers Holdings Inc. (NYSE:KOP), The First Bancshares, Inc. (NASDAQ:FBMS), QCR Holdings, Inc. (NASDAQ:QCRH), and A10 Networks Inc (NYSE:ATEN). This group of stocks’ market valuations are similar to LE’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KOP 13 40875 2
FBMS 8 29781 3
QCRH 10 58309 1
ATEN 18 95129 1
Average 12.25 56024 1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $108 million in LE’s case. A10 Networks Inc (NYSE:ATEN) is the most popular stock in this table. On the other hand The First Bancshares, Inc. (NASDAQ:FBMS) is the least popular one with only 8 bullish hedge fund positions. Lands’ End, Inc. (NASDAQ:LE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately LE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LE were disappointed as the stock returned -23.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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

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