Is Oriental Financial Group Inc. (NYSE:OFG) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Oriental Financial Group Inc. a bargain? The stock has declined by 59% since the beginning of the year and prominent investors are taking a bearish view. The number of long hedge fund positions dropped by 2 in recent months. At the end of this article we will also compare OFG to other stocks, including CEVA, Inc. (NASDAQ:CEVA), Sanchez Energy Corp (NYSE:SN), and Lake Shore Gold Corp Ordinary Shares (Canada) (NYSEMKT:LSG) to get a better sense of its popularity.
According to most investors, hedge funds are assumed to be underperforming, old financial tools of the past. While there are greater than 8000 funds in operation at present, Our researchers look at the elite of this group, approximately 700 funds. These hedge fund managers preside over the majority of the smart money’s total asset base, and by watching their matchless investments, Insider Monkey has found several investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, we’re going to take a look at the recent action regarding Oriental Financial Group Inc. (NYSE:OFG).
How have hedgies been trading Oriental Financial Group Inc. (NYSE:OFG)?
Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a fall of 13% from the second quarter. Among these investors, Second Curve Capital, managed by Tom Brown, holds the number one position in Oriental Financial Group Inc. (NYSE:OFG). Second Curve Capital has a $8.2 million position in the stock, comprising 3.7% of its 13F portfolio. On Second Curve Capital’s heels is Seawolf Capital, managed by Porter Collins, Daniel Moses, and Vincent Daniel, which holds a $5.6 million position; 1.4% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism contain Thomas G. Maheras’ Tegean Capital Management, William Black’s Consector Capital, and Matthew Hulsizer’s PEAK6 Capital Management.
Since Oriental Financial Group Inc. (NYSE:OFG) has witnessed a declining sentiment from hedge fund managers, it’s easy to see that there exists a select few money managers that slashed their full holdings heading into Q4. Interestingly, Ryan Heslop and Ariel Warszawski’s Firefly Value Partners cut the biggest position of all the hedgies followed by Insider Monkey, valued at close to $2.7 million in stock. Peter Muller’s fund, PDT Partners, also sold off its stock, about $2.5 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Oriental Financial Group Inc. (NYSE:OFG). We will take a look at CEVA, Inc. (NASDAQ:CEVA), Sanchez Energy Corp (NYSE:SN), Lake Shore Gold Corp Ordinary Shares (Canada) (NYSEMKT:LSG), and Daktronics, Inc. (NASDAQ:DAKT). This group of stocks’ market values resemble OFG’s market value.
|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 11 hedge funds with bullish positions and the average amount invested in these stocks was $32 million, close to the $31 million in OFG’s case. Sanchez Energy Corp (NYSE:SN) is the most popular stock in this table, while Lake Shore Gold Corp Ordinary Shares (Canada) (NYSEMKT:LSG) is the least popular one with only 7 bullish hedge fund positions. Oriental Financial Group Inc. (NYSE:OFG) 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 SN might be a better candidate to consider a long position.