At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Oxford Square Capital Corp. (NASDAQ:OXSQ) makes for a good investment right now.
Is OXSQ a good stock to buy? Oxford Square Capital Corp. (NASDAQ:OXSQ) has seen a decrease in hedge fund sentiment recently. Oxford Square Capital Corp. (NASDAQ:OXSQ) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 10. There were 7 hedge funds in our database with OXSQ positions at the end of the fourth quarter. Our calculations also showed that OXSQ isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s take a look at the latest hedge fund action surrounding Oxford Square Capital Corp. (NASDAQ:OXSQ).
Do Hedge Funds Think OXSQ Is A Good Stock To Buy Now?
At first quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the previous quarter. The graph below displays the number of hedge funds with bullish position in OXSQ over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the number one position in Oxford Square Capital Corp. (NASDAQ:OXSQ). Arrowstreet Capital has a $2.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Arrowstreet Capital’s heels is John Overdeck and David Siegel of Two Sigma Advisors, with a $1.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish consist of Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Arrowstreet Capital allocated the biggest weight to Oxford Square Capital Corp. (NASDAQ:OXSQ), around 0.0035% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, designating 0.0031 percent of its 13F equity portfolio to OXSQ.
Because Oxford Square Capital Corp. (NASDAQ:OXSQ) has faced bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of fund managers that slashed their entire stakes in the first quarter. Intriguingly, Michael Gelband’s ExodusPoint Capital dropped the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth about $0.2 million in stock. Ken Fisher’s fund, Fisher Asset Management, also dropped its stock, about $0 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the first quarter.
Let’s also examine hedge fund activity in other stocks similar to Oxford Square Capital Corp. (NASDAQ:OXSQ). These stocks are MDC Partners Inc. (NASDAQ:MDCA), SC Health Corporation (NYSE:SCPE), Sanara MedTech Inc. (NASDAQ:SMTI), Ring Energy Inc (NYSE:REI), Unity Bancorp, Inc. (NASDAQ:UNTY), Gaia, Inc. (NASDAQ:GAIA), and RISE Education Cayman Ltd (NASDAQ:REDU). This group of stocks’ market valuations resemble OXSQ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDCA | 9 | 56465 | -4 |
| SCPE | 17 | 54198 | 0 |
| SMTI | 5 | 9761 | 2 |
| REI | 7 | 2298 | 0 |
| UNTY | 4 | 20706 | -1 |
| GAIA | 12 | 35381 | -1 |
| REDU | 2 | 821 | 1 |
| Average | 8 | 25661 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $4 million in OXSQ’s case. SC Health Corporation (NYSE:SCPE) is the most popular stock in this table. On the other hand RISE Education Cayman Ltd (NASDAQ:REDU) is the least popular one with only 2 bullish hedge fund positions. Oxford Square Capital Corp. (NASDAQ:OXSQ) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OXSQ is 28. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on OXSQ, though not to the same extent, as the stock returned 7.4% since the end of Q1 (through June 18th) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
