Hedge Funds Are Buying Omnicell, Inc. (OMCL)

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 at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Omnicell, Inc. (NASDAQ:OMCL).

Is Omnicell, Inc. (NASDAQ:OMCL) worth your attention right now? Money managers are getting more optimistic. The number of long hedge fund positions increased by 4 lately. Our calculations also showed that OMCL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Ken Fisher of Fisher Asset Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a peek at the fresh hedge fund action surrounding Omnicell, Inc. (NASDAQ:OMCL).

How are hedge funds trading Omnicell, Inc. (NASDAQ:OMCL)?

At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OMCL over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Among these funds, Fisher Asset Management held the most valuable stake in Omnicell, Inc. (NASDAQ:OMCL), which was worth $14.8 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $7.7 million worth of shares. GLG Partners, Rhenman & Partners Asset Management, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Rhenman & Partners Asset Management allocated the biggest weight to Omnicell, Inc. (NASDAQ:OMCL), around 0.79% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to OMCL.

Now, specific money managers have been driving this bullishness. Rhenman & Partners Asset Management, managed by Henrik Rhenman, assembled the largest position in Omnicell, Inc. (NASDAQ:OMCL). Rhenman & Partners Asset Management had $5.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $1.8 million position during the quarter. The following funds were also among the new OMCL investors: D. E. Shaw’s D E Shaw, Greg Eisner’s Engineers Gate Manager, and Robert B. Gillam’s McKinley Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Omnicell, Inc. (NASDAQ:OMCL) but similarly valued. We will take a look at El Paso Electric Company (NYSE:EE), Rexnord Corp (NYSE:RXN), Simpson Manufacturing Co, Inc. (NYSE:SSD), and New Relic Inc (NYSE:NEWR). This group of stocks’ market caps match OMCL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EE 23 398088 8
RXN 19 213250 -6
SSD 26 197022 2
NEWR 31 809963 -13
Average 24.75 404581 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $405 million. That figure was $55 million in OMCL’s case. New Relic Inc (NYSE:NEWR) is the most popular stock in this table. On the other hand Rexnord Corp (NYSE:RXN) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Omnicell, Inc. (NASDAQ:OMCL) is even less popular than RXN. Hedge funds dodged a bullet by taking a bearish stance towards OMCL. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. Unfortunately OMCL wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); OMCL investors were disappointed as the stock returned 9.1% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

Follow Omnicell Inc. (NASDAQ:OMCL)

Disclosure: None. This article was originally published at Insider Monkey.