Do Hedge Funds Love Och-Ziff Capital Management Group LLC (OZM)?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Och-Ziff Capital Management Group LLC (NYSE:OZM) investors should be aware of a slight increase in hedge fund sentiment in recent months. OZM was in 12 hedge funds’ portfolios at the end of September. There were 11 hedge funds in our database with OZM holdings at the end of the previous quarter. 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 Great Plains Energy Incorporated (NYSE:GXP), Steel Dynamics, Inc. (NASDAQ:STLD), and SolarCity Corp (NASDAQ:SCTY) to gather more data points.

According to most traders, hedge funds are seen as unimportant, old financial vehicles of years past. While there are over 8000 funds in operation today, We hone in on the upper echelon of this club, about 700 funds. These investment experts administer most of the smart money’s total capital, and by monitoring their matchless stock picks, Insider Monkey has discovered many investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, let’s view the key action surrounding Och-Ziff Capital Management Group LLC (NYSE:OZM).

How are hedge funds trading Och-Ziff Capital Management Group LLC (NYSE:OZM)?

At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Joe DiMenna’s ZWEIG DIMENNA PARTNERS has the number one position in Och-Ziff Capital Management Group LLC (NYSE:OZM), worth close to $27.4 million, amounting to 1.2% of its total 13F portfolio. The second most bullish fund manager is Allan Teh of Kamunting Street Capital, with a $3.2 million position; the fund has 7.9% of its 13F portfolio invested in the stock. Some other peers with similar optimism contain Chuck Royce’s Royce & Associates, John A. Levin’s Levin Capital Strategies and Jim Simons’ Renaissance Technologies.

As aggregate interest increased, specific money managers have jumped into Och-Ziff Capital Management Group LLC (NYSE:OZM) headfirst. Kamunting Street Capital created the biggest position in Och-Ziff Capital Management Group LLC (NYSE:OZM), while Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is David Dreman’s Dreman Value Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Och-Ziff Capital Management Group LLC (NYSE:OZM) but similarly valued. These stocks are Great Plains Energy Incorporated (NYSE:GXP), Steel Dynamics, Inc. (NASDAQ:STLD), SolarCity Corp (NASDAQ:SCTY), and GoPro Inc (NASDAQ:GPRO). All of these stocks’ market caps resemble OZM’s market cap.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $477 million. That figure was just $34 million in OZM’s case. SolarCity Corp (NASDAQ:SCTY) is the most popular stock in this table. On the other hand Great Plains Energy Incorporated (NYSE:GXP) is the least popular one with only 11 bullish hedge fund positions. Och-Ziff Capital Management Group LLC (NYSE:OZM) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SCTY might be a better candidate to consider a long position.