OMNOVA Solutions Inc. (NYSE:OMN) investors should be aware of an increase in support from the world’s most elite money managers in recent months.
According to most traders, hedge funds are assumed to be worthless, old financial tools of years past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the top tier of this group, close to 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by tracking their top stock picks, we have unearthed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the world of equities. Just as you’d expect, there are a number of motivations for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this strategy if investors know where to look (learn more here).
With all of this in mind, it’s important to take a peek at the latest action regarding OMNOVA Solutions Inc. (NYSE:OMN).
What does the smart money think about OMNOVA Solutions Inc. (NYSE:OMN)?
Heading into 2013, a total of 13 of the hedge funds we track were long in this stock, a change of 8% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially.
When looking at the hedgies we track, GAMCO Investors, managed by Mario Gabelli, holds the biggest position in OMNOVA Solutions Inc. (NYSE:OMN). GAMCO Investors has a $10.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Tontine Asset Management, managed by Jeffrey Gendell, which held a $3 million position; 0.8% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Joel Greenblatt’s Gotham Asset Management, Jim Simons’s Renaissance Technologies and Alexander Mitchell’s Scopus Asset Management.
With a general bullishness amongst the heavyweights, key money managers have jumped into OMNOVA Solutions Inc. (NYSE:OMN) headfirst. Whitebox Advisors, managed by Andy Redleaf, initiated the largest position in OMNOVA Solutions Inc. (NYSE:OMN). Whitebox Advisors had 0.6 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Mike Vranos’s Ellington.
How have insiders been trading OMNOVA Solutions Inc. (NYSE:OMN)?
Bullish insider trading is particularly usable when the company in question has seen transactions within the past half-year. Over the last six-month time period, OMNOVA Solutions Inc. (NYSE:OMN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to OMNOVA Solutions Inc. (NYSE:OMN). These stocks are Oil-Dri Corporation of America (NYSE:ODC), Ferro Corporation (NYSE:FOE), KMG Chemicals, Inc. (NYSE:KMG), and Green Plains Renewable Energy Inc. (NASDAQ:GPRE). All of these stocks are in the specialty chemicals industry and their market caps resemble OMN’s market cap.