The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Otter Tail Corporation (NASDAQ:OTTR).
Is OTTR a good stock to buy now? Hedge funds were taking a pessimistic view. The number of bullish hedge fund positions decreased by 2 lately. Otter Tail Corporation (NASDAQ:OTTR) was in 10 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. Our calculations also showed that OTTR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most shareholders, hedge funds are seen as underperforming, outdated financial tools of years past. While there are greater than 8000 funds trading at present, Our experts look at the masters of this group, approximately 850 funds. These investment experts watch over bulk of the smart money’s total asset base, and by following their best investments, Insider Monkey has found a number of investment strategies that have historically surpassed the market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Mario Gabelli of GAMCO Investors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to go over the fresh hedge fund action surrounding Otter Tail Corporation (NASDAQ:OTTR).
Do Hedge Funds Think OTTR Is A Good Stock To Buy Now?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in OTTR a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Otter Tail Corporation (NASDAQ:OTTR), with a stake worth $24.9 million reported as of the end of September. Trailing Renaissance Technologies was GAMCO Investors, which amassed a stake valued at $14.6 million. Millennium Management, Citadel Investment Group, and Two Sigma Advisors 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 GAMCO Investors allocated the biggest weight to Otter Tail Corporation (NASDAQ:OTTR), around 0.16% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to OTTR.
Seeing as Otter Tail Corporation (NASDAQ:OTTR) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there were a few fund managers that decided to sell off their full holdings by the end of the third quarter. Interestingly, Roger Ibbotson’s Zebra Capital Management dumped the largest position of the 750 funds watched by Insider Monkey, comprising an estimated $0.6 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund dumped about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Otter Tail Corporation (NASDAQ:OTTR) but similarly valued. We will take a look at Cortexyme, Inc. (NASDAQ:CRTX), Yelp Inc (NYSE:YELP), United Community Banks Inc (NASDAQ:UCBI), WestAmerica Bancorp. (NASDAQ:WABC), Nova Measuring Instruments Ltd. (NASDAQ:NVMI), MicroStrategy Incorporated (NASDAQ:MSTR), and La-Z-Boy Incorporated (NYSE:LZB). This group of stocks’ market valuations resemble OTTR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRTX | 7 | 21069 | 1 |
| YELP | 27 | 374901 | 0 |
| UCBI | 13 | 38908 | -4 |
| WABC | 12 | 23440 | 0 |
| NVMI | 11 | 212026 | -2 |
| MSTR | 20 | 87203 | -6 |
| LZB | 20 | 67843 | -1 |
| Average | 15.7 | 117913 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.7 hedge funds with bullish positions and the average amount invested in these stocks was $118 million. That figure was $58 million in OTTR’s case. Yelp Inc (NYSE:YELP) is the most popular stock in this table. On the other hand Cortexyme, Inc. (NASDAQ:CRTX) is the least popular one with only 7 bullish hedge fund positions. Otter Tail Corporation (NASDAQ:OTTR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OTTR is 30.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on OTTR as the stock returned 16.9% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
