Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the third quarter. Among them, Valeant and Micron ranked among the top 30 picks and both lost around 20%. Citigroup, which was the third most popular stock, lost 10% amid uncertainty regarding the interest rates. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Oritani Financial Corp. (NASDAQ:ORIT) was in 12 hedge funds’ portfolios at the end of September. ORIT investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. There were 13 hedge funds in our database with ORIT positions at the end of the previous quarter. At the end of this article we will also compare ORIT to other stocks, including Wingstop Inc (NASDAQ:WING), Manchester United PLC (NYSE:MANU), and JinkoSolar Holding Co., Ltd. (NYSE:JKS) to get a better sense of its popularity.
Follow Oritani Financial Corp. (NASDAQ:ORIT)
Follow Oritani Financial Corp. (NASDAQ:ORIT)
To the average investor there are dozens of indicators shareholders use to size up publicly traded companies. A couple of the less known indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the market by a superb margin (see the details here).
With all of this in mind, let’s view the new action regarding Oritani Financial Corp. (NASDAQ:ORIT).
What have hedge funds been doing with Oritani Financial Corp. (NASDAQ:ORIT)?
Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 8% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’s Renaissance Technologies has the number one position in Oritani Financial Corp. (NASDAQ:ORIT), worth close to $26.9 million and accounting for 0.1% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, run by Israel Englander, which holds a $6.1 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions comprise Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.
Due to the fact that Oritani Financial Corp. (NASDAQ:ORIT) has witnessed a declination in interest from hedge fund managers, we can see that there was a specific group of fund managers that slashed their full holdings by the end of the third quarter. It’s worth mentioning that Jeffrey Bronchick’s Cove Street Capital sold off the biggest position of all the hedgies tracked by Insider Monkey, valued at roughly $0.6 million. Glenn Russell Dubin’s fund, Highbridge Capital Management, also said goodbye to its stock, about $0.3 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 fund by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Oritani Financial Corp. (NASDAQ:ORIT). We will take a look at Wingstop Inc (NASDAQ:WING), Manchester United PLC (NYSE:MANU), JinkoSolar Holding Co., Ltd. (NYSE:JKS), and CVR Partners LP (NYSE:UAN). This group of stocks’ market valuations are closest to ORIT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WING | 10 | 21395 | -4 |
| MANU | 9 | 92626 | -1 |
| JKS | 6 | 46179 | -6 |
| UAN | 5 | 2100 | 0 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure in ORIT’s case was also $41 million. Wingstop Inc (NASDAQ:WING) is the most popular stock in this table. On the other hand CVR Partners LP (NYSE:UAN) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Oritani Financial Corp. (NASDAQ:ORIT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
