The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Omnicom Group Inc. (NYSE:OMC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Omnicom Group Inc. (NYSE:OMC) a good investment right now? Money managers are in an optimistic mood. The number of long hedge fund positions advanced by 2 recently. Our calculations also showed that OMC isn’t among the 30 most popular stocks among hedge funds. OMC was in 20 hedge funds’ portfolios at the end of the first quarter of 2019. There were 18 hedge funds in our database with OMC holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to check out the new hedge fund action regarding Omnicom Group Inc. (NYSE:OMC).
How have hedgies been trading Omnicom Group Inc. (NYSE:OMC)?
Heading into the second quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OMC over the last 15 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
The largest stake in Omnicom Group Inc. (NYSE:OMC) was held by Pzena Investment Management, which reported holding $409.8 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $62.8 million position. Other investors bullish on the company included Ariel Investments, Two Sigma Advisors, and GLG Partners.
As industrywide interest jumped, key hedge funds have jumped into Omnicom Group Inc. (NYSE:OMC) headfirst. Renaissance Technologies, managed by Jim Simons, established the largest position in Omnicom Group Inc. (NYSE:OMC). Renaissance Technologies had $62.8 million invested in the company at the end of the quarter. Vikas Lunia’s Lunia Capital also made a $5.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management, Benjamin A. Smith’s Laurion Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s check out hedge fund activity in other stocks similar to Omnicom Group Inc. (NYSE:OMC). These stocks are Alexandria Real Estate Equities Inc (NYSE:ARE), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), Suzano S.A. (NYSE:SUZ), and Twilio Inc. (NYSE:TWLO). All of these stocks’ market caps match OMC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARE | 17 | 207362 | -5 |
| SSNC | 37 | 1718479 | 0 |
| SUZ | 1 | 49875 | 1 |
| TWLO | 59 | 2213976 | 13 |
| Average | 28.5 | 1047423 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.5 hedge funds with bullish positions and the average amount invested in these stocks was $1047 million. That figure was $661 million in OMC’s case. Twilio Inc. (NYSE:TWLO) is the most popular stock in this table. On the other hand Suzano S.A. (NYSE:SUZ) is the least popular one with only 1 bullish hedge fund positions. Omnicom Group Inc. (NYSE:OMC) 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 OMC as the stock returned 11.8% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
