Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Ormat Technologies, Inc. (NYSE:ORA) in this article.
Is Ormat Technologies, Inc. (NYSE:ORA) a splendid stock to buy now? The smart money is in a pessimistic mood. The number of long hedge fund positions fell by 5 lately. The trading environment surrounding Ormat Technologies, Inc. (NYSE:ORA) took a similar turn, with its stock losing 9.69% value throughout the quarter. Such a response prompted us to find more about the hedge fund behavior by covering the ones that held stakes in Ormat Technologies, Inc. (NYSE:ORA) at the end of the third quarter.
To find out hedge funds’ opinion about companies with similar market caps, we will also compare Ormat Technologies, Inc. (NYSE:ORA) to other stocks, including Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), Amicus Therapeutics, Inc. (NASDAQ:FOLD), and Abengoa Yield PLC (NASDAQ:ABY) to get a better sense of its popularity.
Follow Ormat Technologies Inc. (NYSE:ORA)
Follow Ormat Technologies Inc. (NYSE:ORA)
Today, there are a multitude of methods investors employ to evaluate publicly traded companies. Some of the less known methods are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can beat the broader indices by a solid margin (see the details here).
With all of this in mind, we’re going to check out the fresh action regarding Ormat Technologies, Inc. (NYSE:ORA).
How have hedgies been trading Ormat Technologies, Inc. (NYSE:ORA)?
At the end of Q3, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decrease of 42% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ian Simm’s Impax Asset Management has the largest position in Ormat Technologies, Inc. (NYSE:ORA), worth close to $11.8 million, comprising 0.8% of its total 13F portfolio. Coming in second is Renaissance Technologies, holding a $7.8 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish encompass Mario Gabelli’s GAMCO Investors, Bernard Lambilliotte’s Ecofin Ltd and D E Shaw.
Due to the fact that Ormat Technologies, Inc. (NYSE:ORA) has faced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedge funds who were dropping their entire stakes in the third quarter. Intriguingly, Israel Englander’s Millennium Management cut the largest stake of the 700 funds followed by Insider Monkey, worth about $1.2 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also dropped its stock, about $0.6 million worth of shares. These moves are important to note, as total hedge fund interest dropped by 5 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Ormat Technologies, Inc. (NYSE:ORA). These stocks are Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), Amicus Therapeutics, Inc. (NASDAQ:FOLD), Abengoa Yield PLC (NASDAQ:ABY), and International Bancshares Corp (NASDAQ:IBOC). This group of stocks’ market values are similar to Ormat Technologies, Inc. (NYSE:ORA)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LTRPA | 27 | 622359 | -6 |
| FOLD | 26 | 630704 | -5 |
| ABY | 19 | 382687 | -3 |
| IBOC | 12 | 31919 | 0 |
As you can see, these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $417 million. That figure was $25 million in Ormat Technologies, Inc. (NYSE:ORA)’s case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand, International Bancshares Corp (NASDAQ:IBOC) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks, Ormat Technologies, Inc. (NYSE:ORA) is even less popular than International Bancshares Corp (NASDAQ:IBOC). 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.
