We know that hedge funds generate strong risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Opko Health Inc. (NYSE:OPK) .
Is Opko Health Inc. (NYSE:OPK) a buy, sell, or hold? Money managers are becoming hopeful. The number of long hedge fund positions that are disclosed in regulatory 13F filings went up by 3 recently. OPKwas in 20 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with OPK holdings at the end of the previous quarter. At the end of this article we will also compare OPK to other stocks including Axis Capital Holdings Limited (NYSE:AXS), TIM Participacoes SA (ADR) (NYSE:TSU), and Qiagen NV (NASDAQ:QGEN) to get a better sense of its popularity.
Follow Opko Health Inc. (NYSE:OPK)
Follow Opko Health Inc. (NYSE:OPK)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
A and N photography/Shutterstock.com
How are hedge funds trading Opko Health Inc. (NYSE:OPK)?
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a rise of 18% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards OPK over the last 5 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Bridger Management, led by Roberto Mignone, holds the biggest position in Opko Health Inc. (NYSE:OPK). Bridger Management has a $16.1 million position in the stock, comprising 1.1% of its 13F portfolio. On Bridger Management’s heels is Jim Simons’ Renaissance Technologies, which holds a $15 million position. Remaining professional money managers with similar optimism comprise Joel Greenblatt’s Gotham Asset Management, and Hal Mintz’s Sabby Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Renaissance Technologies established the most valuable position in Opko Health Inc. (NYSE:OPK). Ken Griffin’s Citadel Investment Group also made a $3.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Platt and William Reeves’ BlueCrest Capital Mgmt., Israel Englander’s Millennium Management, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Opko Health Inc. (NYSE:OPK) but similarly valued. We will take a look at Axis Capital Holdings Limited (NYSE:AXS), TIM Participacoes SA (ADR) (NYSE:TSU), Qiagen NV (NASDAQ:QGEN), and H&R Block, Inc. (NYSE:HRB). All of these stocks’ market caps match OPK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AXS | 13 | 482259 | 2 |
| TSU | 13 | 327137 | -3 |
| QGEN | 24 | 301168 | 9 |
| HRB | 13 | 153650 | -7 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $316 million. That figure was $56 million in OPK’s case. Qiagen NV (NASDAQ:QGEN) is the most popular stock in this table. On the other hand Axis Capital Holdings Limited (NYSE:AXS) is the least popular one with only 13 bullish hedge fund positions. Opko Health Inc. (NYSE:OPK) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard QGEN might be a better candidate to consider taking a long position in.
Disclosure: None
