Is Oaktree Capital Group LLC (NYSE:OAK) worth your attention right now? Hedge funds are taking a pessimistic view. The number of bullish hedge fund bets fell by 2 in recent months.
According to most market participants, hedge funds are seen as slow, outdated investment vehicles of years past. While there are more than 8000 funds in operation at present, we choose to focus on the moguls of this club, about 450 funds. It is widely believed that this group controls the majority of the smart money’s total capital, and by watching their best investments, we have spotted a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as key, bullish insider trading sentiment is another way to break down the financial markets. Obviously, there are many reasons for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).
With these “truths” under our belt, it’s important to take a gander at the key action surrounding Oaktree Capital Group LLC (NYSE:OAK).
What have hedge funds been doing with Oaktree Capital Group LLC (NYSE:OAK)?
At year’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of -15% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, Russell Hawkins’s Hawkins Capital had the most valuable position in Oaktree Capital Group LLC (NYSE:OAK), worth close to $136 million, comprising 15.6% of its total 13F portfolio. Sitting at the No. 2 spot is Greenlight Capital, managed by David Einhorn, which held a $84 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Thomas Steyer’s Farallon Capital, Curtis Schenker and Craig Effron’s Scoggin and Mark Kingdon’s Kingdon Capital.
Due to the fact that Oaktree Capital Group LLC (NYSE:OAK) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few fund managers that slashed their positions entirely heading into 2013. It’s worth mentioning that Brian Jackelow’s SAB Capital Management said goodbye to the largest investment of all the hedgies we key on, valued at an estimated $17 million in stock., and Steven Tananbaum of GoldenTree Asset Management was right behind this move, as the fund dumped about $12 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds heading into 2013.
How are insiders trading Oaktree Capital Group LLC (NYSE:OAK)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has seen transactions within the past six months. Over the latest six-month time period, Oaktree Capital Group LLC (NYSE:OAK) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Oaktree Capital Group LLC (NYSE:OAK). These stocks are Northern Trust Corporation (NASDAQ:NTRS), Invesco Ltd. (NYSE:IVZ), Affiliated Managers Group, Inc. (NYSE:AMG), Principal Financial Group Inc (NYSE:PFG), and Carlyle Group LP (NASDAQ:CG). This group of stocks belong to the asset management industry and their market caps are similar to OAK’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Northern Trust Corporation (NASDAQ:NTRS) | 21 | 0 | 9 |
| Invesco Ltd. (NYSE:IVZ) | 23 | 0 | 6 |
| Affiliated Managers Group, Inc. (NYSE:AMG) | 14 | 0 | 5 |
| Principal Financial Group Inc (NYSE:PFG) | 11 | 1 | 14 |
| Carlyle Group LP (NASDAQ:CG) | 2 | 0 | 0 |
With the results demonstrated by our tactics, retail investors should always watch hedge fund and insider trading activity, and Oaktree Capital Group LLC (NYSE:OAK) applies perfectly to this mantra.
