Bank Of The Ozarks Inc (NASDAQ:OZRK) reported net income of $44.8 million for the second quarter of fiscal year 2015 after trading closed today, a mighty 69.1% increase over the same quarter a year ago. Diluted earnings per common share for the quarter which ended June 30 was reported to be $0.51, jumping 50.0% from the second quarter of 2014. Wall Street was expecting an identical EPS of $0.51. Shares of the firm are up over 1% in after-hours trading following a 1.25% gain during Monday’s trading session. Bank Of The Ozarks said in its report that as of June 30, deposits stood at $7.09 billion, up by 42.2% from a year ago. Total assets on said date were $8.71 billion, up by 38.3% from a year ago. George Gleason, chairman and chief executive officer, boasted of the firm’s $456 million of growth in non-purchased loans and leases in the company’s press release announcing the results, as well as the $596 million growth in the unfunded balance of closed loans, its efficiency ratio of 36.6%, its net interest margin of 5.37%, and its excellent asset quality.
It’s important to note that the smart money was becoming bullish on Bank Of The Ozarks Inc (NASDAQ:OZRK) heading into the second quarter, likely based on many of the improving fundamental aspects of the company’s operationsd detailed in its latest earnings release. By the end of March, a total of 13 of the hedge funds tracked by Insider Monkey were long in this stock, up by one from the end of December. The total value of their holdings also increased by 31.20% quarter-over-quarter to $80.28 million by the end of March. This is a very bullish sign, as the stock declined by 2.61% during the first quarter. Hedge funds have also been right, as the stock gained 23.88% in the second quarter and is now up slightly in the third/
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 135% and beating the market by more than 80 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.
We also track insider transactions in the form of share purchases or sales to gauge the level of confidence company executives have in their firms. For Bank Of The Ozarks, there were no purchases in the first half of the year. There were, however, some insider sales. Director Catherine Freedberg sold 8,185 shares on June 5, while Director Ross Whipple sold 122,696 shares in three transactions in May.
With this in mind, let’s check out how hedge funds traded Bank Of The Ozarks Inc in the first quarter on the next page.
Hedge fund activity in Bank Of The Ozarks Inc (NASDAQ:OZRK)
Of the funds tracked by Insider Monkey, Cupps Capital Management, led by Drew Cupps, holds the biggest position in Bank Of The Ozarks Inc (NASDAQ:OZRK). Cupps Capital Management has a $13.6 million position in the stock made up of 367,947 shares, comprising 1.2% of its 13F portfolio. Sitting in the second spot is Citadel Investment Group, managed by Ken Griffin, which holds a $10 million position of 271,928 shares; less than 0.1% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism consist of Jim Simons’ Renaissance Technologies, Sharif Siddiqui’s Alpenglow Capital, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
With a general bullishness amongst the heavyweights, key money managers have jumped into Bank Of The Ozarks Inc (NASDAQ:OZRK) headfirst. D.E. Shaw & Co., L.P., managed by David E. Shaw, assembled the largest position in Bank Of The Ozarks Inc (NASDAQ:OZRK). D.E. Shaw & Co., L.P. had $1.35 million invested in the company at the end of the first quarter, buying 36,572 shares. Paul J. Isaac’s Arbiter Partners Capital Management also initiated a $563,000 position during the quarter, consisting of 15,239 shares.
Due to the very bullish sentiment Bank Of The Ozarks Inc (NASDAQ:OZRK) received in the first quarter as well as the solid results it’s displayed for the second quarter, we recommend a long position in the stock.
Disclosure: None
