Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Oritani Financial Corp. (NASDAQ:ORIT) worth your attention right now? Prominent investors are getting more optimistic. The number of long hedge fund positions that are disclosed in regulatory 13F filings moved up by 3 in recent months. ORIT was in 14 hedge funds’ portfolios at the end of September. There were 11 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 A. Schulman Inc (NASDAQ:SHLM), Northfield Bancorp Inc (NASDAQ:NFBK), and Trina Solar Limited (ADR) (NYSE:TSL) to get a better sense of its popularity.
Follow Oritani Financial Corp. (NASDAQ:ORIT)
Follow Oritani Financial Corp. (NASDAQ:ORIT)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What does the smart money think about Oritani Financial Corp. (NASDAQ:ORIT)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 27% gain from one quarter earlier, after several quarters of minimal activity. The graph below displays the number of hedge funds with bullish position in ORIT over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Jim Simons’ Renaissance Technologies has the biggest position in Oritani Financial Corp. (NASDAQ:ORIT), worth close to $24.9 million. The second largest stake is held by Millennium Management, founded by Israel Englander, which holds a $5.8 million position. Other peers that are bullish contain John D. Gillespie’s Prospector Partners, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, key hedge funds were breaking ground themselves. Tudor Investment Corp, led by Paul Tudor Jones, assembled the most valuable position in Oritani Financial Corp. (NASDAQ:ORIT). Tudor Investment Corp had $0.5 million invested in the company at the end of the quarter. Robert B. Gillam’s McKinley Capital Management also made a $0.2 million investment in the stock during the quarter. The other funds with brand new ORIT positions are Gary Claar’s Claar Advisors and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks similar to Oritani Financial Corp. (NASDAQ:ORIT). These stocks are A. Schulman Inc (NASDAQ:SHLM), Northfield Bancorp Inc (NASDAQ:NFBK), Trina Solar Limited (ADR) (NYSE:TSL), and Eldorado Resorts Inc (NASDAQ:ERI). All of these stocks’ market caps resemble ORIT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SHLM | 11 | 77215 | -5 |
| NFBK | 5 | 31621 | 0 |
| TSL | 18 | 206998 | 3 |
| ERI | 22 | 207294 | 0 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $48 million in ORIT’s case. Eldorado Resorts Inc (NASDAQ:ERI) is the most popular stock in this table. On the other hand Northfield Bancorp Inc (NASDAQ:NFBK) is the least popular one with only 5 bullish hedge fund positions. Oritani Financial Corp. (NASDAQ:ORIT) 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 ERI might be a better candidate to consider taking a long position in.
Disclosure: None
