Is Omega Healthcare Investors Inc (NYSE:OHI) a cheap investment today? Prominent investors are getting less optimistic. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
To most investors, hedge funds are assumed to be worthless, old financial vehicles of the past. While there are more than 8000 funds with their doors open at the moment, we choose to focus on the elite of this club, about 450 funds. Most estimates calculate that this group oversees the majority of all hedge funds’ total asset base, and by monitoring their highest performing stock picks, we have spotted a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as important, bullish insider trading sentiment is another way to break down the stock market universe. As the old adage goes: there are lots of stimuli for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).
Consequently, it’s important to take a glance at the key action encompassing Omega Healthcare Investors Inc (NYSE:OHI).
What have hedge funds been doing with Omega Healthcare Investors Inc (NYSE:OHI)?
At Q1’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, David Dreman’s Dreman Value Management had the biggest position in Omega Healthcare Investors Inc (NYSE:OHI), worth close to $44.2 million, comprising 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $36.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Jeffrey Furber’s AEW Capital Management, Richard Driehaus’s Driehaus Capital and Israel Englander’s Millennium Management.
Since Omega Healthcare Investors Inc (NYSE:OHI) has witnessed falling interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of money managers who sold off their positions entirely in Q1. Interestingly, J. Alan Reid, Jr.’s Forward Management sold off the biggest position of all the hedgies we monitor, valued at about $17.1 million in stock., and John Overdeck and David Siegel of Two Sigma Advisors was right behind this move, as the fund sold off about $1.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Omega Healthcare Investors Inc (NYSE:OHI)?
Bullish insider trading is best served when the company in question has seen transactions within the past half-year. Over the latest 180-day time frame, Omega Healthcare Investors Inc (NYSE:OHI) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Omega Healthcare Investors Inc (NYSE:OHI). These stocks are LTC Properties Inc (NYSE:LTC), National Health Investors Inc (NYSE:NHI), Medical Properties Trust, Inc. (NYSE:MPW), Healthcare Realty Trust Inc (NYSE:HR), and Healthcare Trust Of America Inc (NYSE:HTA). All of these stocks are in the reit – healthcare facilities industry and their market caps resemble OHI’s market cap.