In this article we are going to use hedge fund sentiment as a tool and determine whether Oceaneering International, Inc. (NYSE:OII) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Hedge fund interest in Oceaneering International, Inc. (NYSE:OII) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that OII isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare OII to other stocks including RadNet Inc. (NASDAQ:RDNT), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), and TransMedics Group, Inc. (NASDAQ:TMDX) to get a better sense of its popularity.
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Do Hedge Funds Think OII Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 19 hedge funds with a bullish position in OII a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Oceaneering International, Inc. (NYSE:OII) was held by Fisher Asset Management, which reported holding $25.9 million worth of stock at the end of December. It was followed by D E Shaw with a $15.3 million position. Other investors bullish on the company included Renaissance Technologies, Intrinsic Edge Capital, and SIR Capital Management. In terms of the portfolio weights assigned to each position SIR Capital Management allocated the biggest weight to Oceaneering International, Inc. (NYSE:OII), around 1.07% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, dishing out 0.44 percent of its 13F equity portfolio to OII.
Because Oceaneering International, Inc. (NYSE:OII) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds who were dropping their positions entirely in the first quarter. It’s worth mentioning that Peter Muller’s PDT Partners said goodbye to the biggest investment of the 750 funds followed by Insider Monkey, totaling about $1.2 million in stock. Jonathan Soros’s fund, JS Capital, also sold off its stock, about $0.4 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Oceaneering International, Inc. (NYSE:OII) but similarly valued. These stocks are RadNet Inc. (NASDAQ:RDNT), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), TransMedics Group, Inc. (NASDAQ:TMDX), Protagonist Therapeutics, Inc. (NASDAQ:PTGX), Agilysys, Inc. (NASDAQ:AGYS), Meridian Bioscience, Inc. (NASDAQ:VIVO), and GreenSky, Inc. (NASDAQ:GSKY). This group of stocks’ market values match OII’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $82 million in OII’s case. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) is the most popular stock in this table. On the other hand TransMedics Group, Inc. (NASDAQ:TMDX) is the least popular one with only 3 bullish hedge fund positions. Oceaneering International, Inc. (NYSE:OII) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OII is 73.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on OII, though not to the same extent, as the stock returned 14.4% since Q1 (through July 16th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.