The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Bank Of The Ozarks Inc (NASDAQ:OZRK) based on those filings.
Overall, Bank of Ozarks is not very popular among the funds we track with only 13 funds reporting stakes in the company as of the end of September, down by two over the quarter. However, 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 or drop 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 Dun & Bradstreet Corp (NYSE:DNB), LPL Financial Holdings Inc (NASDAQ:LPLA), and Nordson Corporation (NASDAQ:NDSN) to gather more data points.
To most traders, hedge funds are seen as worthless, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open today, We look at the elite of this group, around 700 funds. These money managers handle most of the hedge fund industry’s total capital, and by tracking their inimitable picks, Insider Monkey has come up with many investment strategies that have historically outrun the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, let’s take a look at the new action encompassing Bank Of The Ozarks Inc (NASDAQ:OZRK).
What does the smart money think about Bank Of The Ozarks Inc (NASDAQ:OZRK)?
Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 13% from the previous quarter. Among these funds, Sirios Capital Management, managed by John Brennan, holds the largest position in Bank Of The Ozarks Inc (NASDAQ:OZRK). Sirios Capital Management has an $74.6 million position in the stock, comprising 2.4% of its 13F portfolio. On Sirios Capital Management’s heels is Clifford Fox’s Columbus Circle Investors, with a $16.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. The remaining hedge funds and institutional investors with similar optimism encompass Drew Cupps’s Cupps Capital Management, Jim Simons’ Renaissance Technologies, and Emanuel J. Friedman’s EJF Capital.
Because Bank Of The Ozarks Inc (NASDAQ:OZRK) has faced falling interest from hedge fund managers, logic holds that there lies a certain “tier” of money managers that elected to cut their positions entirely last quarter. Intriguingly, Sharif Siddiqui’s Alpenglow Capital dropped the biggest stake of the “upper crust” of funds watched by Insider Monkey, comprising about $4.2 million in stock. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $3.6 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Bank Of The Ozarks Inc (NASDAQ:OZRK). These stocks are Dun & Bradstreet Corp (NYSE:DNB), LPL Financial Holdings Inc (NASDAQ:LPLA), Nordson Corporation (NASDAQ:NDSN), and DST Systems, Inc. (NYSE:DST). This group of stocks’ market valuations are similar to OZRK’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $470 million. That figure was $129 million in OZRK’s case. DST Systems, Inc. (NYSE:DST) is the most popular stock in this table with 24 funds reporting long positions. On the other hand Nordson Corporation (NASDAQ:NDSN) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Bank Of The Ozarks Inc (NASDAQ:OZRK) is even less popular than NDSN. 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.