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 Bank OZK (NASDAQ:OZK) based on those filings.
Is OZK a good stock to buy now? Bank OZK (NASDAQ:OZK) has seen an increase in activity from the world’s largest hedge funds in recent months. Bank OZK (NASDAQ:OZK) was in 20 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 25. There were 17 hedge funds in our database with OZK positions at the end of the second quarter. Our calculations also showed that OZK 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are assumed to be unimportant, old financial tools of the past. While there are more than 8000 funds with their doors open at present, We choose to focus on the top tier of this club, around 850 funds. Most estimates calculate that this group of people preside over most of the hedge fund industry’s total capital, and by tailing their unrivaled stock picks, Insider Monkey has determined a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 let’s take a look at the key hedge fund action regarding Bank OZK (NASDAQ:OZK).
Do Hedge Funds Think OZK Is A Good Stock To Buy Now?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OZK over the last 21 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Diamond Hill Capital was the largest shareholder of Bank OZK (NASDAQ:OZK), with a stake worth $106.3 million reported as of the end of September. Trailing Diamond Hill Capital was Citadel Investment Group, which amassed a stake valued at $33.1 million. Millennium Management, Arrowstreet Capital, and Giverny Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Giverny Capital allocated the biggest weight to Bank OZK (NASDAQ:OZK), around 0.69% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, earmarking 0.59 percent of its 13F equity portfolio to OZK.
As one would reasonably expect, key money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the largest position in Bank OZK (NASDAQ:OZK). Arrowstreet Capital had $8.4 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also made a $2.5 million investment in the stock during the quarter. The other funds with brand new OZK positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Greg Eisner’s Engineers Gate Manager, and Minhua Zhang’s Weld Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Bank OZK (NASDAQ:OZK) but similarly valued. We will take a look at Synaptics Incorporated (NASDAQ:SYNA), WPX Energy Inc (NYSE:WPX), AMN Healthcare Services Inc (NYSE:AMN), Advanced Disposal Services, Inc. (NYSE:ADSW), Spire Inc. (NYSE:SR), SPS Commerce, Inc. (NASDAQ:SPSC), and Box, Inc. (NYSE:BOX). All of these stocks’ market caps match OZK’s market cap.
|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 23.6 hedge funds with bullish positions and the average amount invested in these stocks was $321 million. That figure was $178 million in OZK’s case. Box, Inc. (NYSE:BOX) is the most popular stock in this table. On the other hand SPS Commerce, Inc. (NASDAQ:SPSC) is the least popular one with only 14 bullish hedge fund positions. Bank OZK (NASDAQ:OZK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OZK is 43.1. 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. Our calculations showed that top 20 most popular stocks among hedge funds 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 December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on OZK as the stock returned 45% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.