Hedge Funds Are Betting On OceanFirst Financial Corp. (OCFC)

The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded OceanFirst Financial Corp. (NASDAQ:OCFC) based on those filings.

OceanFirst Financial Corp. (NASDAQ:OCFC) was in 7 hedge funds’ portfolios at the end of the third quarter of 2015. OceanFirst Financial Corp. (NASDAQ:OCFC) has experienced an increase in hedge fund sentiment of late. There were 5 hedge funds in our database with OceanFirst Financial Corp. (NASDAQ:OCFC) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Consolidated-Tomoka Land Co. (NYSEMKT:CTO), BioSpecifics Technologies Corp. (NASDAQ:BSTC), and Vocera Communications Inc (NYSE:VCRA) to gather more data points.

If you’d ask most market participants, hedge funds are perceived as worthless, outdated investment tools of the past. While there are over 8000 funds in operation at present, we hone in on the crème de la crème of this group, around 700 funds. These hedge fund managers shepherd most of the hedge fund industry’s total capital, and by paying attention to their unrivaled picks, Insider Monkey has unearthed many investment strategies that have historically outpaced the broader indices. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, let’s take a gander at the latest action regarding OceanFirst Financial Corp. (NASDAQ:OCFC).

What have hedge funds been doing with OceanFirst Financial Corp. (NASDAQ:OCFC)?

Heading into Q4, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 40% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Basswood Capital, managed by Matthew Lindenbaum, holds the biggest position in OceanFirst Financial Corp. (NASDAQ:OCFC). Basswood Capital has an $8.2 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Renaissance Technologies, holding a $7.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions encompass Fred Cummings’ Elizabeth Park Capital Management, Gregg J. Powers’ Private Capital Management, and Israel Englander’s Millennium Management.

Consequently, some big names were leading the bulls’ herd. Millennium Management initiated the most outsized position in OceanFirst Financial Corp. (NASDAQ:OCFC). Millennium Management had $0.4 million invested in the company at the end of the quarter. D E Shaw also made a $0.2 million investment in the stock during the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as OceanFirst Financial Corp. (NASDAQ:OCFC) but similarly valued. These stocks are Consolidated-Tomoka Land Co. (NYSEMKT:CTO), BioSpecifics Technologies Corp. (NASDAQ:BSTC), Vocera Communications Inc (NYSE:VCRA), and Brookfield Total Return Fund Inc (NYSE:HTR). All of these stocks’ market caps are closest to OceanFirst Financial Corp. (NASDAQ:OCFC)’s market cap.

As you can see, these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $27 million in OceanFirst Financial Corp. (NASDAQ:OCFC)’s case. Vocera Communications Inc (NYSE:VCRA) is the most popular stock in this table. On the other hand, Brookfield Total Return Fund Inc (NYSE:HTR) is the least popular one with only 4 bullish hedge fund positions. OceanFirst Financial Corp. (NASDAQ:OCFC) 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. In this regard, Vocera Communications Inc (NYSE:VCRA) might be a better candidate to consider a long position.