We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of OMNOVA Solutions Inc. (NYSE:OMN) based on that data.
OMNOVA Solutions Inc. (NYSE:OMN) has seen an increase in hedge fund sentiment in recent months. Our calculations also showed that OMN 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.
To most shareholders, hedge funds are seen as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at present, Our researchers look at the crème de la crème of this group, approximately 750 funds. These investment experts preside over the majority of the hedge fund industry’s total capital, and by tailing their finest equity investments, Insider Monkey has identified many investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
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. Keeping this in mind we’re going to check out the fresh hedge fund action encompassing OMNOVA Solutions Inc. (NYSE:OMN).
How are hedge funds trading OMNOVA Solutions Inc. (NYSE:OMN)?
Heading into the fourth quarter of 2019, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in OMN over the last 17 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies holds the largest position in OMNOVA Solutions Inc. (NYSE:OMN). Renaissance Technologies has a $17.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Magnetar Capital, managed by Alec Litowitz and Ross Laser, which holds a $14.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions contain Mario Gabelli’s GAMCO Investors, John Orrico’s Water Island Capital and James A. Mitarotonda’s Barington Capital Group. In terms of the portfolio weights assigned to each position Barington Capital Group allocated the biggest weight to OMNOVA Solutions Inc. (NYSE:OMN), around 12.49% of its 13F portfolio. Cruiser Capital Advisors is also relatively very bullish on the stock, setting aside 1.08 percent of its 13F equity portfolio to OMN.
As industrywide interest jumped, key money managers have been driving this bullishness. Magnetar Capital, managed by Alec Litowitz and Ross Laser, initiated the most valuable position in OMNOVA Solutions Inc. (NYSE:OMN). Magnetar Capital had $14.9 million invested in the company at the end of the quarter. John Orrico’s Water Island Capital also made a $13 million investment in the stock during the quarter. The other funds with brand new OMN positions are Paul Glazer’s Glazer Capital, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Donald Sussman’s Paloma Partners.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as OMNOVA Solutions Inc. (NYSE:OMN) but similarly valued. We will take a look at Sundial Growers Inc. (NASDAQ:SNDL), Magic Software Enterprises Ltd. (NASDAQ:MGIC), Vista Oil & Gas, S.A.B. de C.V. (NYSE:VIST), and Haynes International, Inc. (NASDAQ:HAYN). All of these stocks’ market caps match OMN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNDL | 8 | 22374 | 8 |
| MGIC | 2 | 4833 | -1 |
| VIST | 8 | 65440 | 8 |
| HAYN | 15 | 55569 | 5 |
| Average | 8.25 | 37054 | 5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $96 million in OMN’s case. Haynes International, Inc. (NASDAQ:HAYN) is the most popular stock in this table. On the other hand Magic Software Enterprises Ltd. (NASDAQ:MGIC) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks OMNOVA Solutions Inc. (NYSE:OMN) is more popular among hedge funds. 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. Unfortunately OMN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on OMN were disappointed as the stock returned 0.5% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
