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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Lazard Ltd (NYSE:LAZ) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Hedge fund interest in Lazard Ltd (NYSE:LAZ) shares was flat at the end of last quarter. Hedge funds are in a wait-and-see mode for the last 12 months. 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 Stag Industrial Inc (NYSE:STAG), Mirati Therapeutics, Inc. (NASDAQ:MRTX), and Amedisys Inc (NASDAQ:AMED) to gather more data points. Our calculations also showed that Lazard isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a gander at the key hedge fund action surrounding Lazard Ltd (NYSE:LAZ).
How are hedge funds trading Lazard Ltd (NYSE:LAZ)?
At the end of the second quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LAZ over the last 16 quarters. With hedgies' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Lazard Ltd (NYSE:LAZ) was held by Southeastern Asset Management, which reported holding $248.1 million worth of stock at the end of March. It was followed by Ariel Investments with a $197.4 million position. Other investors bullish on the company included Fisher Asset Management, Royce & Associates, and Two Sigma Advisors.
Because Lazard Ltd (NYSE:LAZ) has faced falling interest from the smart money, we can see that there were a few hedgies who sold off their full holdings last quarter. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital said goodbye to the biggest position of the "upper crust" of funds tracked by Insider Monkey, totaling about $13.2 million in stock, and Renaissance Technologies was right behind this move, as the fund sold off about $10.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to Lazard Ltd (NYSE:LAZ). These stocks are Stag Industrial Inc (NYSE:STAG), Mirati Therapeutics, Inc. (NASDAQ:MRTX), Amedisys Inc (NASDAQ:AMED), and FibroGen Inc (NASDAQ:FGEN). This group of stocks' market values resemble LAZ's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STAG,11,138143,-4 MRTX,27,1623476,-1 AMED,24,209888,-2 FGEN,16,316897,-5 Average,19.5,572101,-3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $572 million. That figure was $590 million in LAZ's case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Stag Industrial Inc (NYSE:STAG) is the least popular one with only 11 bullish hedge fund positions. Lazard Ltd (NYSE:LAZ) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on LAZ, though not to the same extent, as the stock returned 3.1% during the third quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.