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Hedge Funds Are Selling Och-Ziff Capital Management Group LLC (OZM)

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Och-Ziff Capital Management Group LLC (NYSE:OZM) has experienced a decrease in enthusiasm from smart money of late.

Och-Ziff Capital Management Group LLC (NYSE:OZM)

To most traders, hedge funds are viewed as worthless, old financial vehicles of the past. While there are greater than 8000 funds trading today, we at Insider Monkey choose to focus on the bigwigs of this group, around 450 funds. It is estimated that this group oversees the lion’s share of the smart money’s total capital, and by paying attention to their top stock picks, we have revealed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as key, positive insider trading activity is another way to break down the financial markets. Just as you’d expect, there are plenty of reasons for an insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).

With all of this in mind, it’s important to take a glance at the recent action surrounding Och-Ziff Capital Management Group LLC (NYSE:OZM).

Hedge fund activity in Och-Ziff Capital Management Group LLC (NYSE:OZM)

Heading into Q2, a total of 13 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings significantly.

When looking at the hedgies we track, Levin Capital Strategies, managed by John A. Levin, holds the most valuable position in Och-Ziff Capital Management Group LLC (NYSE:OZM). Levin Capital Strategies has a $16.8 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $16.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Wojciech Uzdelewicz’s Espalier Global Management, Joe DiMenna’s ZWEIG DIMENNA PARTNERS and Dmitry Balyasny’s Balyasny Asset Management.

Due to the fact that Och-Ziff Capital Management Group LLC (NYSE:OZM) has faced declining sentiment from the aggregate hedge fund industry, we can see that there was a specific group of hedge funds that slashed their positions entirely last quarter. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group dropped the biggest investment of all the hedgies we watch, worth close to $15.6 million in stock.. Gifford Combs’s fund, Dalton Investments, also sold off its stock, about $0.4 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

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

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time period, Och-Ziff Capital Management Group LLC (NYSE:OZM) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Och-Ziff Capital Management Group LLC (NYSE:OZM). These stocks are American Capital Ltd. (NASDAQ:ACAS), Waddell & Reed Financial, Inc. (NYSE:WDR), Lazard Ltd (NYSE:LAZ), Legg Mason, Inc. (NYSE:LM), and KKR & Co. L.P. (NYSE:KKR). This group of stocks belong to the asset management industry and their market caps match OZM’s market cap.

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