Is Owens & Minor, Inc. (NYSE:OMI) 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.
Owens & Minor, Inc. (NYSE:OMI) shareholders have witnessed an increase in support from the world’s most elite money managers of late. Our calculations also showed that OMI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
John Overdeck of Two Sigma Advisors
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s go over the fresh hedge fund action regarding Owens & Minor, Inc. (NYSE:OMI).
What have hedge funds been doing with Owens & Minor, Inc. (NYSE:OMI)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 23% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in OMI a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
The largest stake in Owens & Minor, Inc. (NYSE:OMI) was held by Royce & Associates, which reported holding $11.7 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $7.3 million position. Other investors bullish on the company included Clough Capital Partners, D E Shaw, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Clough Capital Partners allocated the biggest weight to Owens & Minor, Inc. (NYSE:OMI), around 0.47% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, designating 0.38 percent of its 13F equity portfolio to OMI.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Clough Capital Partners, managed by Charles Clough, created the largest position in Owens & Minor, Inc. (NYSE:OMI). Clough Capital Partners had $5.7 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $1.3 million position during the quarter. The following funds were also among the new OMI investors: Mike Vranos’s Ellington, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks similar to Owens & Minor, Inc. (NYSE:OMI). We will take a look at Tecnoglass Inc. (NASDAQ:TGLS), Old Second Bancorp Inc. (NASDAQ:OSBC), Ciner Resources LP (NYSE:CINR), and Cambridge Bancorp (NASDAQ:CATC). This group of stocks’ market valuations are closest to OMI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TGLS | 8 | 11898 | 3 |
| OSBC | 9 | 32875 | -3 |
| CINR | 1 | 5077 | 0 |
| CATC | 4 | 15228 | -1 |
| Average | 5.5 | 16270 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $39 million in OMI’s case. Old Second Bancorp Inc. (NASDAQ:OSBC) is the most popular stock in this table. On the other hand Ciner Resources LP (NYSE:CINR) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Owens & Minor, Inc. (NYSE:OMI) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on OMI as the stock returned 13.9% during the first two months of Q4 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
