As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the third quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Oil-Dri Corporation of America (NYSE:ODC).
Is Oil-Dri Corporation of America (NYSE:ODC) going to take off soon? The best stock pickers are taking an optimistic view. The number of long hedge fund bets increased by 1 recently. Our calculations also showed that ODC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Mario Gabelli of GAMCO Investors
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now we’re going to go over the new hedge fund action regarding Oil-Dri Corporation of America (NYSE:ODC).
How are hedge funds trading Oil-Dri Corporation of America (NYSE:ODC)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in ODC a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Mario Gabelli’s GAMCO Investors has the largest position in Oil-Dri Corporation of America (NYSE:ODC), worth close to $18.6 million, comprising 0.2% of its total 13F portfolio. Coming in second is Renaissance Technologies which holds a $13.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism consist of Israel Englander’s Millennium Management, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and . In terms of the portfolio weights assigned to each position GAMCO Investors allocated the biggest weight to Oil-Dri Corporation of America (NYSE:ODC), around 0.15% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to ODC.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most valuable position in Oil-Dri Corporation of America (NYSE:ODC). Millennium Management had $0.2 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to Oil-Dri Corporation of America (NYSE:ODC). We will take a look at Stellus Capital Investment Corporation (NYSE:SCM), The Joint Corp. (NASDAQ:JYNT), Radiant Logistics, Inc. (NYSE:RLGT), and Adesto Technologies Corporation (NASDAQ:IOTS). All of these stocks’ market caps are similar to ODC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SCM | 4 | 5946 | 0 |
| JYNT | 12 | 57003 | 2 |
| RLGT | 14 | 11751 | 2 |
| IOTS | 14 | 54092 | 6 |
| Average | 11 | 32198 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $32 million in ODC’s case. Radiant Logistics, Inc. (NYSE:RLGT) is the most popular stock in this table. On the other hand Stellus Capital Investment Corporation (NYSE:SCM) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Oil-Dri Corporation of America (NYSE:ODC) is even less popular than SCM. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on ODC, though not to the same extent, as the stock returned 7.3% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
