Is Omnicom Group Inc. (NYSE:OMC) a marvelous stock to buy now? Money managers are taking a pessimistic view. The number of bullish hedge fund positions decreased by 5 in recent months.
To the average investor, there are a multitude of gauges investors can use to analyze publicly traded companies. A couple of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can beat the broader indices by a significant margin (see just how much).
Just as key, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are many reasons for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).
Now, let’s take a gander at the recent action regarding Omnicom Group Inc. (NYSE:OMC).
What does the smart money think about Omnicom Group Inc. (NYSE:OMC)?
At year’s end, a total of 20 of the hedge funds we track were long in this stock, a change of -20% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the biggest position in Omnicom Group Inc. (NYSE:OMC). First Eagle Investment Management has a $430 million position in the stock, comprising 1.5% of its 13F portfolio. Sitting at the No. 2 spot is Pzena Investment Management, managed by Richard S. Pzena, which held a $367 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include James H. Litinsk’s JHL Capital Group, Phill Gross and Robert Atchinson’s Adage Capital Management and John W. Rogers’s Ariel Investments.
Seeing as Omnicom Group Inc. (NYSE:OMC) has witnessed falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers that decided to sell off their full holdings at the end of the year. At the top of the heap, John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co cut the largest investment of the 450+ funds we monitor, totaling close to $5 million in stock.. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also dropped its stock, about $5 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 5 funds at the end of the year.
How have insiders been trading Omnicom Group Inc. (NYSE:OMC)?
Insider buying is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time period, Omnicom Group Inc. (NYSE:OMC) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned time-tested strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Omnicom Group Inc. (NYSE:OMC) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.