In this article we are going to use hedge fund sentiment as a tool and determine whether Lee Enterprises, Incorporated (NYSE:LEE) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Lee Enterprises, Incorporated (NYSE:LEE) investors should pay attention to a decrease in support from the world's most elite money managers recently. Lee Enterprises, Incorporated (NYSE:LEE) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 15. There were 6 hedge funds in our database with LEE positions at the end of the fourth quarter. Our calculations also showed that LEE isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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J. Carlo Cannell of Cannell Capital
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Do Hedge Funds Think LEE Is A Good Stock To Buy Now?
At first quarter's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -50% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LEE over the last 23 quarters. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Cannell Capital, managed by J. Carlo Cannell, holds the most valuable position in Lee Enterprises, Incorporated (NYSE:LEE). Cannell Capital has a $13.5 million position in the stock, comprising 3% of its 13F portfolio. The second largest stake is held by Solas Capital Management, led by Frederick Tucker Golden, holding a $3.7 million position; 3.1% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Renaissance Technologies, and . In terms of the portfolio weights assigned to each position Solas Capital Management allocated the biggest weight to Lee Enterprises, Incorporated (NYSE:LEE), around 3.14% of its 13F portfolio. Cannell Capital is also relatively very bullish on the stock, dishing out 3.02 percent of its 13F equity portfolio to LEE.
Seeing as Lee Enterprises, Incorporated (NYSE:LEE) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there were a few hedge funds that slashed their full holdings last quarter. It's worth mentioning that Randall Smith's Alden Global Capital sold off the largest investment of the 750 funds followed by Insider Monkey, totaling an estimated $5.2 million in stock. Matthew Hulsizer's fund, PEAK6 Capital Management, also said goodbye to its stock, about $0.3 million worth. These transactions are interesting, as total hedge fund interest fell by 3 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Lee Enterprises, Incorporated (NYSE:LEE) but similarly valued. We will take a look at Ardmore Shipping Corp (NYSE:ASC), Champions Oncology, Inc. (NASDAQ:CSBR), Dyadic International, Inc. (NASDAQ:DYAI), X4 Pharmaceuticals, Inc. (NASDAQ:XFOR), First Community Corporation (NASDAQ:FCCO), Lyra Therapeutics, Inc. (NASDAQ:LYRA), and Pluristem Therapeutics Inc. (NASDAQ:PSTI). This group of stocks' market caps resemble LEE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ASC,7,16255,-4 CSBR,2,5737,-1 DYAI,4,2901,-1 XFOR,11,55792,4 FCCO,2,5481,0 LYRA,5,52552,-2 PSTI,7,20524,4 Average,5.4,22749,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.4 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $18 million in LEE's case. X4 Pharmaceuticals, Inc. (NASDAQ:XFOR) is the most popular stock in this table. On the other hand Champions Oncology, Inc. (NASDAQ:CSBR) is the least popular one with only 2 bullish hedge fund positions. Lee Enterprises, Incorporated (NYSE:LEE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LEE is 13.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on LEE as the stock returned 17.2% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.