Is Omnicare, Inc. (NYSE:OCR) a buy right now? Prominent investors are turning bullish. The number of bullish hedge fund bets increased by 1 recently.
To the average investor, there are many indicators market participants can use to track publicly traded companies. A couple of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the S&P 500 by a superb amount (see just how much).
Equally as beneficial, optimistic insider trading activity is a second way to parse down the marketplace. Obviously, there are plenty of incentives for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if you understand where to look (learn more here).
With all of this in mind, we're going to take a gander at the recent action surrounding Omnicare, Inc. (NYSE:OCR).
In preparation for this year, a total of 22 of the hedge funds we track held long positions in this stock, a change of 5% from the third quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, David Cohen and Harold Levy's Iridian Asset Management had the biggest position in Omnicare, Inc. (NYSE:OCR), worth close to $255 million, comprising 4.2% of its total 13F portfolio. On Iridian Asset Management's heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $237 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Some other peers that are bullish include Peter Adam Hochfelder's Brahman Capital, Jean-Marie Eveillard's First Eagle Investment Management and Wallace Weitz's Wallace R. Weitz & Co..
As one would reasonably expect, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Omnicare, Inc. (NYSE:OCR). Arrowstreet Capital had 237 million invested in the company at the end of the quarter. Curtis Macnguyen's Ivory Capital (Investment Mgmt) also made a $1 million investment in the stock during the quarter. The following funds were also among the new OCR investors: Ken Gray and Steve Walsh's Bryn Mawr Capital, Joe DiMenna's ZWEIG DIMENNA PARTNERS, and Mike Vranos's Ellington.
Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past half-year. Over the last 180-day time period, Omnicare, Inc. (NYSE:OCR) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
With the returns exhibited by Insider Monkey's research, retail investors must always monitor hedge fund and insider trading activity, and Omnicare, Inc. (NYSE:OCR) is an important part of this process.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.