Does Omnicell, Inc. (NASDAQ:OMCL) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Omnicell, Inc. (NASDAQ:OMCL) investors should pay attention to an increase in support from the world’s most elite money managers recently. Our calculations also showed that OMCL isn’t among the 30 most popular stocks among hedge funds.
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. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Noam Gottesman, GLG Partners
Let’s take a look at the fresh hedge fund action surrounding Omnicell, Inc. (NASDAQ:OMCL).
Hedge fund activity in Omnicell, Inc. (NASDAQ:OMCL)
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the fourth quarter of 2018. By comparison, 6 hedge funds held shares or bullish call options in OMCL a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Omnicell, Inc. (NASDAQ:OMCL), which was worth $26.2 million at the end of the first quarter. On the second spot was Point72 Asset Management which amassed $17.8 million worth of shares. Moreover, Winton Capital Management, Driehaus Capital, and Gotham Asset Management were also bullish on Omnicell, Inc. (NASDAQ:OMCL), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Gotham Asset Management, managed by Joel Greenblatt, assembled the biggest position in Omnicell, Inc. (NASDAQ:OMCL). Gotham Asset Management had $3.1 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $2.3 million position during the quarter. The other funds with brand new OMCL positions are D. E. Shaw’s D E Shaw, Dmitry Balyasny’s Balyasny Asset Management, and Jeffrey Talpins’s Element Capital Management.
Let’s now review hedge fund activity in other stocks similar to Omnicell, Inc. (NASDAQ:OMCL). We will take a look at Azul S.A. (NYSE:AZUL), Outfront Media Inc (NYSE:OUT), BankUnited, Inc. (NYSE:BKU), and Sunstone Hotel Investors Inc (NYSE:SHO). All of these stocks’ market caps are closest to OMCL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AZUL | 12 | 151033 | 1 |
| OUT | 25 | 334752 | 8 |
| BKU | 19 | 536410 | -2 |
| SHO | 20 | 156169 | 4 |
| Average | 19 | 294591 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $295 million. That figure was $78 million in OMCL’s case. Outfront Media Inc (NYSE:OUT) is the most popular stock in this table. On the other hand Azul S.A. (NYSE:AZUL) is the least popular one with only 12 bullish hedge fund positions. Omnicell, Inc. (NASDAQ:OMCL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on OMCL as the stock returned 7.2% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
