The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Opera Limited (NASDAQ:OPRA) based on those filings.
Is Opera Limited (NASDAQ:OPRA) a good stock to buy here? Prominent investors were taking a bearish view. The number of bullish hedge fund positions shrunk by 1 in recent months. Opera Limited (NASDAQ:OPRA) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. Our calculations also showed that OPRA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 5 hedge funds in our database with OPRA holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to review the recent hedge fund action regarding Opera Limited (NASDAQ:OPRA).
What does smart money think about Opera Limited (NASDAQ:OPRA)?
At third quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards OPRA over the last 21 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Claes Fornell’s CSat Investment Advisory has the number one position in Opera Limited (NASDAQ:OPRA), worth close to $1.2 million, comprising 0.1% of its total 13F portfolio. On CSat Investment Advisory’s heels is ExodusPoint Capital, managed by Michael Gelband, which holds a $0.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise Israel Englander’s Millennium Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position CSat Investment Advisory allocated the biggest weight to Opera Limited (NASDAQ:OPRA), around 0.11% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, dishing out 0.0044 percent of its 13F equity portfolio to OPRA.
Judging by the fact that Opera Limited (NASDAQ:OPRA) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few money managers that slashed their full holdings in the third quarter. At the top of the heap, Ben Gordon’s Blue Grotto Capital said goodbye to the largest position of the 750 funds followed by Insider Monkey, worth about $3.9 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $0.3 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Opera Limited (NASDAQ:OPRA) but similarly valued. These stocks are New Gold Inc. (NYSE:NGD), SilverCrest Metals Inc. (NYSE:SILV), Atrion Corporation (NASDAQ:ATRI), Mack Cali Realty Corp (NYSE:CLI), Victory Capital Holdings, Inc. (NASDAQ:VCTR), Revolve Group, Inc. (NYSE:RVLV), and First Bancorp (NYSE:FBP). This group of stocks’ market valuations resemble OPRA’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $2 million in OPRA’s case. Revolve Group, Inc. (NYSE:RVLV) is the most popular stock in this table. On the other hand Victory Capital Holdings, Inc. (NASDAQ:VCTR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Opera Limited (NASDAQ:OPRA) is even less popular than VCTR. Our overall hedge fund sentiment score for OPRA is 12. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards OPRA. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th but managed to beat the market again by 16.1 percentage points. Unfortunately OPRA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); OPRA investors were disappointed as the stock returned -8.6% since the end of the third quarter (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.