Was The Smart Money Right About Opera Limited (OPRA)?

Hedge funds don’t get the respect they used to get. Nowadays investors prefer passive funds over actively managed funds. One thing they don’t realize is that 100% of the passive funds didn’t see the coronavirus recession coming, but a lot of hedge funds did. Even we published an article near the end of February and predicted a US recession. Think about all the losses you could have avoided if you sold your shares in February and bought them back at the end of March. In this article we look at what those investors think of Opera Limited (NASDAQ:OPRA).

Opera Limited (NASDAQ:OPRA) was in 15 hedge funds’ portfolios at the end of the fourth quarter of 2019. OPRA has seen an increase in hedge fund sentiment of late. There were 13 hedge funds in our database with OPRA holdings at the end of the previous quarter. Our calculations also showed that OPRA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).

At the moment there are numerous signals stock traders use to value stocks. Some of the less utilized signals are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best fund managers can beat the S&P 500 by a solid amount (see the details here).


Ken Griffin of Citadel Investment Group

We leave no stone unturned when looking for the next great investment idea. For example, this investor can predict short term winners following earnings announcements with high accuracy, so we check out his stock picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s review the new hedge fund action regarding Opera Limited (NASDAQ:OPRA).

What have hedge funds been doing with Opera Limited (NASDAQ:OPRA)?

At Q4’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in OPRA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Opera Limited (NASDAQ:OPRA) was held by Park West Asset Management, which reported holding $9.5 million worth of stock at the end of September. It was followed by Blue Grotto Capital with a $2.6 million position. Other investors bullish on the company included Sloane Robinson Investment Management, Citadel Investment Group, and CSat Investment Advisory. In terms of the portfolio weights assigned to each position Blue Grotto Capital allocated the biggest weight to Opera Limited (NASDAQ:OPRA), around 2.03% of its 13F portfolio. Sloane Robinson Investment Management is also relatively very bullish on the stock, designating 0.87 percent of its 13F equity portfolio to OPRA.

Now, some big names were leading the bulls’ herd. Blue Grotto Capital, managed by Ben Gordon, created the most valuable position in Opera Limited (NASDAQ:OPRA). Blue Grotto Capital had $2.6 million invested in the company at the end of the quarter. John Osterweis’s Osterweis Capital Management also initiated a $1 million position during the quarter. The other funds with brand new OPRA positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Mike Vranos’s Ellington.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Opera Limited (NASDAQ:OPRA) but similarly valued. We will take a look at Mesa Laboratories, Inc. (NASDAQ:MLAB), Playa Hotels & Resorts N.V. (NASDAQ:PLYA), iHeartMedia, Inc. (NASDAQ:IHRT), and Weis Markets, Inc. (NYSE:WMK). This group of stocks’ market caps resemble OPRA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MLAB 10 110335 1
PLYA 18 506471 1
IHRT 31 221245 5
WMK 12 50262 -4
Average 17.75 222078 0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $222 million. That figure was $23 million in OPRA’s case. iHeartMedia, Inc. (NASDAQ:IHRT) is the most popular stock in this table. On the other hand Mesa Laboratories, Inc. (NASDAQ:MLAB) is the least popular one with only 10 bullish hedge fund positions. Opera Limited (NASDAQ:OPRA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st but beat the market by 12.9 percentage points. Unfortunately OPRA wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); OPRA investors were disappointed as the stock returned -39.5% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Disclosure: None. This article was originally published at Insider Monkey.