Is Opko Health Inc. (NYSE:OPK) a bargain? The best stock pickers are turning less bullish. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
In the 21st century investor’s toolkit, there are a multitude of metrics investors can use to track publicly traded companies. A couple of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can beat the broader indices by a significant margin (see just how much).
Just as key, bullish insider trading sentiment is a second way to break down the world of equities. There are many incentives for an executive to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if you know where to look (learn more here).
With these "truths" under our belt, let's take a gander at the key action encompassing Opko Health Inc. (NYSE:OPK).
At the end of the fourth quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Highfields Capital Management, managed by Jonathon Jacobson, holds the biggest position in Opko Health Inc. (NYSE:OPK). Highfields Capital Management has a $8 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is JANA Partners, managed by Barry Rosenstein, which held a $6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Mark Kingdon's Kingdon Capital, Gregory Fraser, Rudolph Kluiber, and Timothy Kroch's GRT Capital Partners and D. E. Shaw's D E Shaw.
Since Opko Health Inc. (NYSE:OPK) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there were a few money managers that elected to cut their full holdings in Q4. Intriguingly, Peter J. Eichler Jr.'s Aletheia Research and Management cut the biggest investment of the 450+ funds we watch, comprising close to $28 million in stock.. Matt Sirovich and Jeremy Mindich's fund, Scopia Capital, also dropped its stock, about $1 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).
Insider trading activity, especially when it's bullish, is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Opko Health Inc. (NYSE:OPK) has seen 3 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to Opko Health Inc. (NYSE:OPK). These stocks are Sirona Dental Systems, Inc. (NASDAQ:SIRO), Mine Safety Appliances (NYSE:MSA), Align Technology, Inc. (NASDAQ:ALGN), STERIS Corp (NYSE:STE), and Techne Corporation (NASDAQ:TECH). All of these stocks are in the medical appliances & equipment industry and their market caps resemble OPK's market cap.