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Did Hedge Funds Drop The Ball On Opera Limited (OPRA) ?

Nina Todic

Is Opera Limited (NASDAQ:OPRA) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Opera Limited (NASDAQ:OPRA) investors should pay attention to a decrease in support from the world's most elite money managers of late. OPRA was in 5 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 8 hedge funds in our database with OPRA holdings at the end of the previous quarter. Our calculations also showed that opra isn't among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Discovery Capital Management

We're going to take a gander at the latest hedge fund action regarding Opera Limited (NASDAQ:OPRA).

Hedge fund activity in Opera Limited (NASDAQ:OPRA)

At Q4's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -38% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OPRA over the last 14 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with OPRA Positions

Of the funds tracked by Insider Monkey, Rob Citrone's Discovery Capital Management has the biggest position in Opera Limited (NASDAQ:OPRA), worth close to $3.2 million, corresponding to 0.3% of its total 13F portfolio. The second most bullish fund manager is Marshall Wace LLP, managed by Paul Marshall and Ian Wace, which holds a $1.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that are bullish consist of Hugh Sloane's Sloane Robinson Investment Management, Ken Griffin's Citadel Investment Group and Israel Englander's Millennium Management.

Judging by the fact that Opera Limited (NASDAQ:OPRA) has experienced a decline in interest from hedge fund managers, we can see that there is a sect of hedge funds who sold off their positions entirely last quarter. It's worth mentioning that Michael Platt and William Reeves's BlueCrest Capital Mgmt. cut the largest position of the "upper crust" of funds tracked by Insider Monkey, valued at an estimated $0.7 million in stock. Steve Cohen's fund, Point72 Asset Management, also dropped its stock, about $0.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let's now review hedge fund activity in other stocks similar to Opera Limited (NASDAQ:OPRA). These stocks are Bojangles' Inc (NASDAQ:BOJA), ProQR Therapeutics NV (NASDAQ:PRQR), Waitr Holdings Inc. (NASDAQ:WTRH), and Guaranty Bancorp (NASDAQ:GBNK). All of these stocks' market caps resemble OPRA's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BOJA,12,37500,-2 PRQR,11,104917,-1 WTRH,18,166535,-2 GBNK,11,57905,-1 Average,13,91714,-1.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $5 million in OPRA's case. Waitr Holdings Inc. (NASDAQ:WTRH) is the most popular stock in this table. On the other hand ProQR Therapeutics NV (NASDAQ:PRQR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Opera Limited (NASDAQ:OPRA) is even less popular than PRQR. Hedge funds clearly dropped the ball on OPRA as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on OPRA as the stock returned 54.1% and outperformed the market by an even larger margin.

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

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