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Should I Buy Oasis Midstream Partners LP (OMP)?

·6 min read

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Oasis Midstream Partners LP (NASDAQ:OMP) based on those filings.

Oasis Midstream Partners LP (NASDAQ:OMP) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds' portfolios at the end of September. Our calculations also showed that OMP 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). At the end of this article we will also compare OMP to other stocks including Maui Land & Pineapple Co. (NYSE:MLP), Alpine Immune Sciences, Inc. (NASDAQ:ALPN), and YRC Worldwide, Inc. (NASDAQ:YRCW) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are numerous tools stock traders can use to appraise publicly traded companies. A duo of the most innovative tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the best fund managers can trounce the S&P 500 by a solid amount (see the details here).

Emanuel J. Friedman
Emanuel J. Friedman

Emanuel Friedman of EJF Capital

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 10 most profitable companies in the world 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. Now we're going to view the new hedge fund action regarding Oasis Midstream Partners LP (NASDAQ:OMP).

What have hedge funds been doing with Oasis Midstream Partners LP (NASDAQ:OMP)?

At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in OMP over the last 21 quarters. So, let's review 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, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital has the largest position in Oasis Midstream Partners LP (NASDAQ:OMP), worth close to $1.4 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Marshall Wace LLP, led by Paul Marshall and Ian Wace, holding a $0.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to Oasis Midstream Partners LP (NASDAQ:OMP), around 0.01% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, designating 0.0023 percent of its 13F equity portfolio to OMP.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was EJF Capital).

Let's also examine hedge fund activity in other stocks similar to Oasis Midstream Partners LP (NASDAQ:OMP). These stocks are Maui Land & Pineapple Co. (NYSE:MLP), Alpine Immune Sciences, Inc. (NASDAQ:ALPN), YRC Worldwide, Inc. (NASDAQ:YRCW), Genie Energy Ltd (NYSE:GNE), Dyadic International, Inc. (NASDAQ:DYAI), CTO Realty Growth Inc (NYSE:CTO), and Concrete Pumping Holdings, Inc. (NASDAQ:BBCP). This group of stocks' market valuations resemble OMP's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MLP,4,8841,1 ALPN,12,81013,7 YRCW,9,8497,-1 GNE,8,11912,-2 DYAI,4,5392,1 CTO,8,17012,-4 BBCP,7,33602,0 Average,7.4,23753,0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.4 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $2 million in OMP's case. Alpine Immune Sciences, Inc. (NASDAQ:ALPN) is the most popular stock in this table. On the other hand Maui Land & Pineapple Co. (NYSE:MLP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Oasis Midstream Partners LP (NASDAQ:OMP) is even less popular than MLP. Our overall hedge fund sentiment score for OMP is 23. 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. Hedge funds clearly dropped the ball on OMP as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on OMP as the stock returned 83.9% since Q3 (through November 23rd) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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