Here is What Hedge Funds Think About Omega Healthcare Investors Inc (OHI)

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 September 30 holdings, data that is available nowhere else. Should you consider Omega Healthcare Investors Inc (NYSE:OHI) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Omega Healthcare Investors Inc (NYSE:OHI) investors should pay attention to a decrease in hedge fund interest of late. There were 15 hedge funds in our database with OHI holdings at the end of the previous quarter, versus 11 at the end of Q3. At the end of this article we will also compare OHI to other stocks including Southwestern Energy Company (NYSE:SWN), Lennox International Inc. (NYSE:LII), and W.P. Carey Inc. REIT (NYSE:WPC) to get a better sense of its popularity.

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Keeping this in mind, let’s take a glance at the fresh action regarding Omega Healthcare Investors Inc (NYSE:OHI).

How are hedge funds trading Omega Healthcare Investors Inc (NYSE:OHI)?

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -27% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in OHI at the beginning of this year. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

HedgeFund

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Two Sigma Advisors, led by John Overdeck and David Siegel, holds the most valuable position in Omega Healthcare Investors Inc (NYSE:OHI). Two Sigma Advisors has a $13.9 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Renaissance Technologies, one of the biggest hedge funds in the world, holding a $11.3 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Ken Griffin’s Citadel Investment Group, and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that sold off their entire stakes in the stock during the third quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest stake of the 700 funds followed by Insider Monkey, valued at close to $14.7 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $2.6 million worth of shares.

Let’s now review hedge fund activity in other stocks similar to Omega Healthcare Investors Inc (NYSE:OHI). These stocks are Southwestern Energy Company (NYSE:SWN), Lennox International Inc. (NYSE:LII), W.P. Carey Inc. REIT (NYSE:WPC), and Stericycle Inc (NASDAQ:SRCL). This group of stocks’ market values are similar to OHI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SWN 37 1263324 -11
LII 16 100308 1
WPC 16 133759 5
SRCL 26 459724 4

As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $489 million. That figure was $50 million in OHI’s case. Southwestern Energy Company (NYSE:SWN) is the most popular stock in this table. On the other hand Lennox International Inc. (NYSE:LII) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Omega Healthcare Investors Inc (NYSE:OHI) is even less popular than LII. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.