After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Bank OZK (NASDAQ:OZK).
Is Bank OZK (NASDAQ:OZK) going to take off soon? Investors who are in the know were becoming hopeful. The number of long hedge fund bets rose by 3 lately. Bank OZK (NASDAQ:OZK) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 25. Our calculations also showed that OZK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 19 hedge funds in our database with OZK holdings at the end of June.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a glance at the recent hedge fund action regarding Bank OZK (NASDAQ:OZK).
Gavin Saitowitz of Prelude Capital
Do Hedge Funds Think OZK Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in OZK over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Bank OZK (NASDAQ:OZK), which was worth $39.5 million at the end of the third quarter. On the second spot was Schonfeld Strategic Advisors which amassed $25.7 million worth of shares. AQR Capital Management, Renaissance Technologies, and D E Shaw 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 Global Frontier Investments allocated the biggest weight to Bank OZK (NASDAQ:OZK), around 3.92% of its 13F portfolio. Neo Ivy Capital is also relatively very bullish on the stock, setting aside 0.51 percent of its 13F equity portfolio to OZK.
As aggregate interest increased, specific money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Bank OZK (NASDAQ:OZK). Arrowstreet Capital had $6 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $1.2 million investment in the stock during the quarter. The following funds were also among the new OZK investors: Karim Abbadi and Edward McBride’s Centiva Capital, Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital), and Joel Greenblatt’s Gotham Asset Management.
Let’s now review hedge fund activity in other stocks similar to Bank OZK (NASDAQ:OZK). These stocks are Crane Co. (NYSE:CR), Blue Owl Capital Inc. (NYSE:OWL), KBR, Inc. (NYSE:KBR), Douglas Emmett, Inc. (NYSE:DEI), Cousins Properties Incorporated (NYSE:CUZ), Owl Rock Capital Corporation (NYSE:ORCC), and Innovative Industrial Properties, Inc. (NYSE:IIPR). This group of stocks’ market caps match OZK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CR | 20 | 286246 | -5 |
| OWL | 20 | 1208379 | 20 |
| KBR | 31 | 1056115 | -5 |
| DEI | 13 | 291446 | -6 |
| CUZ | 14 | 170754 | -3 |
| ORCC | 14 | 180844 | -1 |
| IIPR | 12 | 265784 | -3 |
| Average | 17.7 | 494224 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.7 hedge funds with bullish positions and the average amount invested in these stocks was $494 million. That figure was $129 million in OZK’s case. KBR, Inc. (NYSE:KBR) is the most popular stock in this table. On the other hand Innovative Industrial Properties, Inc. (NYSE:IIPR) is the least popular one with only 12 bullish hedge fund positions. Bank OZK (NASDAQ:OZK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OZK is 60.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on OZK as the stock returned 9% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
