While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, increasing oil prices and optimism towards the resolution of the trade war with China, many smart money investors kept their cautious approach regarding the current bull run in the first quarter and hedging or reducing many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Oppenheimer Holdings Inc. (NYSE:OPY).
Is Oppenheimer Holdings Inc. (NYSE:OPY) a buy, sell, or hold? Investors who are in the know are buying. The number of long hedge fund bets advanced by 1 lately. Our calculations also showed that opy isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most stock holders, hedge funds are assumed to be worthless, old investment tools of years past. While there are over 8000 funds in operation at present, Our experts hone in on the masters of this club, around 750 funds. Most estimates calculate that this group of people direct bulk of all hedge funds’ total capital, and by tailing their first-class picks, Insider Monkey has revealed a few investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Noam Gottesman, GLG Partners
We’re going to take a glance at the latest hedge fund action encompassing Oppenheimer Holdings Inc. (NYSE:OPY).
What does smart money think about Oppenheimer Holdings Inc. (NYSE:OPY)?
At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OPY over the last 15 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Oppenheimer Holdings Inc. (NYSE:OPY), with a stake worth $11.1 million reported as of the end of March. Trailing Renaissance Technologies was AQR Capital Management, which amassed a stake valued at $8 million. GLG Partners, Arrowstreet Capital, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, some big names have jumped into Oppenheimer Holdings Inc. (NYSE:OPY) headfirst. Millennium Management, managed by Israel Englander, initiated the most valuable position in Oppenheimer Holdings Inc. (NYSE:OPY). Millennium Management had $0.4 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.4 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to Oppenheimer Holdings Inc. (NYSE:OPY). We will take a look at Enterprise Bancorp, Inc (NASDAQ:EBTC), Merus N.V. (NASDAQ:MRUS), Kadmon Holdings, Inc. (NYSE:KDMN), and Peoples Financial Services Corp. (NASDAQ:PFIS). This group of stocks’ market valuations resemble OPY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EBTC | 1 | 1296 | -2 |
| MRUS | 6 | 109071 | 0 |
| KDMN | 15 | 150710 | 5 |
| PFIS | 1 | 2374 | 0 |
| Average | 5.75 | 65863 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $35 million in OPY’s case. Kadmon Holdings, Inc. (NYSE:KDMN) is the most popular stock in this table. On the other hand Enterprise Bancorp, Inc (NASDAQ:EBTC) is the least popular one with only 1 bullish hedge fund positions. Oppenheimer Holdings Inc. (NYSE:OPY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately OPY wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on OPY were disappointed as the stock returned 3% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
