World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Opko Health Inc. (NYSE:OPK) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. Our calculations also showed that opk isn’t among the 30 most popular stocks among hedge funds.
To most traders, hedge funds are perceived as underperforming, outdated financial vehicles of yesteryear. While there are over 8,000 funds with their doors open today, We choose to focus on the elite of this club, around 700 funds. These hedge fund managers manage the lion’s share of the smart money’s total asset base, and by keeping an eye on their matchless picks, Insider Monkey has unearthed a few investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by 6 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Let’s check out the recent hedge fund action encompassing Opko Health Inc. (NYSE:OPK).
What have hedge funds been doing with Opko Health Inc. (NYSE:OPK)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OPK over the last 13 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Opko Health Inc. (NYSE:OPK), with a stake worth $7.1 million reported as of the end of September. Trailing Millennium Management was Citadel Investment Group, which amassed a stake valued at $1.9 million. Citadel Investment Group, Stevens Capital Management, and Tudor Investment Corp were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key hedge funds were leading the bulls’ herd. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the most outsized position in Opko Health Inc. (NYSE:OPK). Tudor Investment Corp had $0.5 million invested in the company at the end of the quarter. Matthew Strobeck’s Birchview Capital also made a $0.4 million investment in the stock during the quarter. The other funds with brand new OPK positions are Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Jim Simons’s Renaissance Technologies, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s check out hedge fund activity in other stocks similar to Opko Health Inc. (NASDAQ:OPK). We will take a look at Silicon Motion Technology Corp. (NASDAQ:SIMO), Vector Group Ltd (NYSE:VGR), Cars.com Inc. (NYSE:CARS), and The Greenbrier Companies, Inc. (NYSE:GBX). This group of stocks’ market values match OPK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SIMO | 16 | 221088 | 3 |
| VGR | 18 | 174166 | 1 |
| CARS | 30 | 447879 | 7 |
| GBX | 15 | 105838 | -7 |
| Average | 19.75 | 237243 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $237 million. That figure was $5 million in OPK’s case. Cars.com Inc. (NYSE:CARS) is the most popular stock in this table. On the other hand The Greenbrier Companies, Inc. (NYSE:GBX) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Opko Health Inc. (NASDAQ:OPK) is even less popular than GBX. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None. This article was originally published at Insider Monkey.
