As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the third quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Park-Ohio Holdings Corp. (NASDAQ:PKOH).
Park-Ohio Holdings Corp. (NASDAQ:PKOH) investors should pay attention to an increase in hedge fund interest lately. Our calculations also showed that PKOH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are a large number of metrics market participants have at their disposal to size up stocks. Some of the best metrics are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can beat the S&P 500 by a significant margin (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a gander at the fresh hedge fund action regarding Park-Ohio Holdings Corp. (NASDAQ:PKOH).
Hedge fund activity in Park-Ohio Holdings Corp. (NASDAQ:PKOH)
Heading into the fourth quarter of 2019, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. By comparison, 11 hedge funds held shares or bullish call options in PKOH a year ago. So, let’s check 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, Mario Gabelli’s GAMCO Investors has the most valuable position in Park-Ohio Holdings Corp. (NASDAQ:PKOH), worth close to $22.7 million, comprising 0.2% of its total 13F portfolio. The second most bullish fund manager is Royce & Associates, managed by Chuck Royce, which holds a $2.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism encompass Renaissance Technologies, Frederick DiSanto’s Ancora Advisors and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Park-Ohio Holdings Corp. (NASDAQ:PKOH), around 0.28% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, setting aside 0.19 percent of its 13F equity portfolio to PKOH.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Marshall Wace, managed by Paul Marshall and Ian Wace, assembled the most valuable position in Park-Ohio Holdings Corp. (NASDAQ:PKOH). Marshall Wace had $0 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Park-Ohio Holdings Corp. (NASDAQ:PKOH) but similarly valued. These stocks are VirnetX Holding Corporation (NYSE:VHC), Southern National Banc. of Virginia, Inc (NASDAQ:SONA), Diplomat Pharmacy Inc (NYSE:DPLO), and Spark Energy, Inc. (NASDAQ:SPKE). This group of stocks’ market valuations are closest to PKOH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VHC | 4 | 470 | 1 |
| SONA | 9 | 21060 | 2 |
| DPLO | 10 | 62382 | 2 |
| SPKE | 8 | 14186 | -3 |
| Average | 7.75 | 24525 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $29 million in PKOH’s case. Diplomat Pharmacy Inc (NYSE:DPLO) is the most popular stock in this table. On the other hand VirnetX Holding Corporation (NYSE:VHC) is the least popular one with only 4 bullish hedge fund positions. Park-Ohio Holdings Corp. (NASDAQ:PKOH) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on PKOH, though not to the same extent, as the stock returned 6.3% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
