Hedge Funds Are Cashing Out Of Ollie’s Bargain Outlet Holdings Inc (OLLI)

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI).

Is Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) a worthy investment right now? The best stock pickers were taking a bearish view. The number of bullish hedge fund positions shrunk by 3 lately. Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic is 34. Our calculations also showed that OLLI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s view the fresh hedge fund action surrounding Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI).

Do Hedge Funds Think OLLI Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the previous quarter. By comparison, 24 hedge funds held shares or bullish call options in OLLI a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Akre Capital Management held the most valuable stake in Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), which was worth $42.1 million at the end of the second quarter. On the second spot was PEAK6 Capital Management which amassed $17.9 million worth of shares. Citadel Investment Group, Bridgewater Associates, and Prentice Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Prentice Capital Management allocated the biggest weight to Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), around 2.46% of its 13F portfolio. Kehrs Ridge Capital is also relatively very bullish on the stock, setting aside 0.86 percent of its 13F equity portfolio to OLLI.

Since Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) has witnessed bearish sentiment from the smart money, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their positions entirely in the second quarter. It’s worth mentioning that Yen Liow’s Aravt Global dumped the largest position of the 750 funds tracked by Insider Monkey, totaling an estimated $10.4 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $6.5 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds in the second quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) but similarly valued. These stocks are TG Therapeutics Inc (NASDAQ:TGTX), ImmunityBio, Inc. (NASDAQ:IBRX), Synaptics Incorporated (NASDAQ:SYNA), Teradata Corporation (NYSE:TDC), Bank OZK (NASDAQ:OZK), Cousins Properties Incorporated (NYSE:CUZ), and Quidel Corporation (NASDAQ:QDEL). This group of stocks’ market caps are closest to OLLI’s market cap.

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As you can see these stocks had an average of 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $321 million. That figure was $110 million in OLLI’s case. TG Therapeutics Inc (NASDAQ:TGTX) is the most popular stock in this table. On the other hand ImmunityBio, Inc. (NASDAQ:IBRX) is the least popular one with only 7 bullish hedge fund positions. Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OLLI is 53.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately OLLI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OLLI were disappointed as the stock returned -20.4% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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

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