Is Otter Tail Corporation (OTTR) Going to Burn These Hedge Funds?

As one would reasonably expect, specific money managers have jumped into Otter Tail Corporation (NASDAQ:OTTR) headfirst. Millennium Management assembled the most outsized position in Otter Tail Corporation (NASDAQ:OTTR). Millennium Management had $2.3 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new OTTR investors: John Overdeck and David Siegel’s Two Sigma Advisors, Glenn Russell Dubin’s Highbridge Capital Management, and D E Shaw.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as an Otter Tail Corporation (NASDAQ: OTTR) but similarly valued. These stocks are Ultra Petroleum Corp. (NYSE:UPL), ScanSource, Inc. (NASDAQ:SCSC), Xoom Corp (NASDAQ:XOOM), and Boston Private Financial Hldg Inc (NASDAQ:BPFH). This group of stocks’ market caps is closest to Otter Tail Corporation (NASDAQ: OTTR)’s market cap.

As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $23 million in Otter Tail Corporation (NASDAQ: OTTR)’s case. Ultra Petroleum Corp. (NYSE:UPL) is the most popular stock in this table. On the other hand, ScanSource, Inc. (NASDAQ:SCSC) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks, Otter Tail Corporation (NASDAQ:OTTR) is even less popular than ScanSource, Inc. (NASDAQ:SCSC). 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.