Is Orbital ATK Inc (OA) a Good Stock to Buy?

The market has been volatile due to elections and the potential of another Federal Reserve rate increase. Small cap stocks have been on a tear, as the Russell 2000 ETF (IWM) has outperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points since the end of June. SEC filings and hedge fund investor letters indicate that the smart money seems to be getting back in stocks, and the funds’ movements is one of the reasons why small-cap stocks are red hot. In this article, we will analyze what the smart money thinks of Orbital ATK Inc (NYSE:OA) and find out how it is affected by hedge funds’ moves.

So, is Orbital ATK Inc (NYSE:OA) a buy here? Hedge funds seem to be getting more bullish, judging by the fact that the number of bullish hedge fund bets inched up by one to 33 during the third quarter. At the end of this article we will also compare OA to other stocks including Weatherford International Ltd (NYSE:WFT), First Solar, Inc. (NASDAQ:FSLR), and Keysight Technologies Inc (NYSE:KEYS) to get a better sense of its popularity.

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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Keeping this in mind, we’re going to review the key action encompassing Orbital ATK Inc (NYSE:OA).

How have hedgies been trading Orbital ATK Inc (NYSE:OA)?

At the end of September, 33 funds tracked by Insider Monkey were long Orbital ATK, up by 3% over the quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Anand Parekh’s Alyeska Investment Group has the number one position in Orbital ATK Inc (NYSE:OA), worth close to $99.6 million, accounting for 1% of its total 13F portfolio. On Alyeska Investment Group’s heels is Israel Englander’s Millennium Management, which holds a $96.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions include Cliff Asness’ AQR Capital Management and Richard Barrera’s Roystone Capital Partners.