Do Hedge Funds Love Oxford Industries, Inc. (OXM)?

Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Oxford Industries, Inc. (NYSE:OXM) .

Oxford Industries, Inc. (NYSE:OXM) was in 15 hedge funds’ portfolios at the end of the third quarter of 2016. OXM has seen an increase in enthusiasm from smart money of late. There were 10 hedge funds in our database with OXM holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Glaukos Corp (NYSE:GKOS), Orion Engineered Carbons SA (NYSE:OEC), and Employers Holdings, Inc. (NYSE:EIG) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Hedge fund activity in Oxford Industries, Inc. (NYSE:OXM)

Heading into the fourth quarter of 2016, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 50% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in OXM over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Mariko Gordon’s Daruma Asset Management has the biggest position in Oxford Industries, Inc. (NYSE:OXM), worth close to $44.6 million, corresponding to 2.7% of its total 13F portfolio. Coming in second is SG Capital Management, led by Ken Grossman and Glen Schneider, holding a $21.5 million position; 6.1% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism include Jim Simons’ Renaissance Technologies and Ken Griffin’s Citadel Investment Group. We should note that SG Capital Management is 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.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Cardinal Capital, led by Amy Minella, assembled the most valuable position in Oxford Industries, Inc. (NYSE:OXM). Cardinal Capital had $16.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $15.3 million investment in the stock during the quarter. The other funds with brand new OXM positions are David David Keidan’s Buckingham Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and D. E. Shaw’s D E Shaw.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Oxford Industries, Inc. (NYSE:OXM) but similarly valued. We will take a look at Glaukos Corp (NYSE:GKOS), Orion Engineered Carbons SA (NYSE:OEC), Employers Holdings, Inc. (NYSE:EIG), and BancFirst Corporation (NASDAQ:BANF). This group of stocks’ market valuations match OXM’s market valuation.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $124 million in OXM’s case. Glaukos Corp (NYSE:GKOS) is the most popular stock in this table. On the other hand BancFirst Corporation (NASDAQ:BANF) is the least popular one with only 8 bullish hedge fund positions. Oxford Industries, Inc. (NYSE:OXM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GKOS might be a better candidate to consider taking a long position in.

Disclosure: None