It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Omega Protein Corporation (NYSE:OME) .
Overall, Omega Protein Corporation (NYSE:OME) has seen an increase in enthusiasm from smart money in the third quarter. At the end of September, the number of funds from the Insider Monkey database long Omega Protein Corporation amounted to 17, compared to 14 funds a quarter earlier. At the end of this article we will also compare OME to other stocks including WCI Communities Inc (NYSE:WCIC), Francesca’s Holdings Corp (NASDAQ:FRAN), and Almost Family, Inc. (NASDAQ:AFAM) to get a better sense of its popularity.
Follow Omega Protein Corp (NYSE:OME)
Follow Omega Protein Corp (NYSE:OME)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s take a look at the key action regarding Omega Protein Corporation (NYSE:OME).
What have hedge funds been doing with Omega Protein Corporation (NYSE:OME)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 21% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in OME heading into 2016. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Cliff Asness’ AQR Capital Management has the number one position in Omega Protein Corporation (NYSE:OME), worth close to $17.7 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Nelson Obus’ Wynnefield Capital, with a $10.4 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David E. Shaw’s D E Shaw, and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Renaissance Technologies initiated the most valuable position in Omega Protein Corporation (NYSE:OME). Renaissance Technologies had $3.1 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also initiated a $0.6 million position during the quarter. The following funds were also among the new OME investors: Joshua Packwood and Schuster Tanger’s Radix Partners, Mike Vranos’ Ellington, and Matthew Tewksbury’s Stevens Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Omega Protein Corporation (NYSE:OME) but similarly valued. We will take a look at WCI Communities Inc (NYSE:WCIC), Francesca’s Holdings Corp (NASDAQ:FRAN), Almost Family, Inc. (NASDAQ:AFAM), and Dorchester Minerals LP (NASDAQ:DMLP). This group of stocks’ market values are similar to OME’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WCIC | 14 | 120478 | 2 |
| FRAN | 24 | 141500 | 3 |
| AFAM | 15 | 42517 | 1 |
| DMLP | 4 | 15451 | 0 |
As you can see these stocks had an average of 14 funds with bullish positions and the average amount invested in these stocks was $80 million, versus $60 million in OME’s case. Francesca’s Holdings Corp (NASDAQ:FRAN) is the most popular stock in this table. On the other hand Dorchester Minerals LP (NASDAQ:DMLP) is the least popular one with only four investors having reported long positions. Omega Protein Corporation (NYSE:OME) 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. In this regard Francesca’s Holdings Corp (NASDAQ:FRAN) might be a better candidate to consider taking a long position in.
