We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Omnicell, Inc. (NASDAQ:OMCL).
Is Omnicell, Inc. (NASDAQ:OMCL) an outstanding investment today? Hedge funds are becoming more confident. The number of long hedge fund bets inched up by 2 in recent months. Our calculations also showed that OMCL isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by more than 41 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 35.3% through March 3rd. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Fisher of Fisher Asset Management
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a look at the key hedge fund action regarding Omnicell, Inc. (NASDAQ:OMCL).
How have hedgies been trading Omnicell, Inc. (NASDAQ:OMCL)?
At Q4’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in OMCL a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fisher Asset Management was the largest shareholder of Omnicell, Inc. (NASDAQ:OMCL), with a stake worth $25.9 million reported as of the end of September. Trailing Fisher Asset Management was Point72 Asset Management, which amassed a stake valued at $24 million. Marshall Wace LLP, Millennium Management, and AQR 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 Quantinno Capital allocated the biggest weight to Omnicell, Inc. (NASDAQ:OMCL), around 0.26% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, designating 0.13 percent of its 13F equity portfolio to OMCL.
As one would reasonably expect, some big names have jumped into Omnicell, Inc. (NASDAQ:OMCL) headfirst. AlphaCrest Capital Management, managed by Mika Toikka, established the most valuable position in Omnicell, Inc. (NASDAQ:OMCL). AlphaCrest Capital Management had $1.3 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $0.6 million position during the quarter. The other funds with brand new OMCL positions are Hoon Kim’s Quantinno Capital and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Omnicell, Inc. (NASDAQ:OMCL) but similarly valued. We will take a look at Neogen Corporation (NASDAQ:NEOG), CRISPR Therapeutics AG (NASDAQ:CRSP), Lithia Motors Inc (NYSE:LAD), and Cimpress NV (NASDAQ:CMPR). This group of stocks’ market values match OMCL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NEOG | 16 | 17534 | 1 |
| CRSP | 30 | 297776 | 13 |
| LAD | 29 | 661944 | 3 |
| CMPR | 18 | 707978 | 6 |
| Average | 23.25 | 421308 | 5.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $421 million. That figure was $96 million in OMCL’s case. CRISPR Therapeutics AG (NASDAQ:CRSP) is the most popular stock in this table. On the other hand Neogen Corporation (NASDAQ:NEOG) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Omnicell, Inc. (NASDAQ:OMCL) is even less popular than NEOG. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but managed to beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on OMCL, though not to the same extent, as the stock returned -22.7% during the same time period and outperformed the market as well.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
