Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Oportun Financial Corporation (NASDAQ:OPRT).
Is Oportun Financial Corporation (NASDAQ:OPRT) a good stock to buy now? Hedge funds are in a bullish mood. The number of bullish hedge fund bets advanced by 4 lately. Our calculations also showed that OPRT isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_27209" align="aligncenter" width="394"] Jim Simons Founder of Renaissance Technologies[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a glance at the fresh hedge fund action surrounding Oportun Financial Corporation (NASDAQ:OPRT).
How are hedge funds trading Oportun Financial Corporation (NASDAQ:OPRT)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the fourth quarter of 2019. By comparison, 0 hedge funds held shares or bullish call options in OPRT a year ago. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Mendon Capital Advisors held the most valuable stake in Oportun Financial Corporation (NASDAQ:OPRT), which was worth $1.4 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $0.4 million worth of shares. D E Shaw, ExodusPoint Capital, and Renaissance Technologies 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 Mendon Capital Advisors allocated the biggest weight to Oportun Financial Corporation (NASDAQ:OPRT), around 0.69% of its 13F portfolio. Wildcat Capital Management is also relatively very bullish on the stock, dishing out 0.09 percent of its 13F equity portfolio to OPRT.
As aggregate interest increased, specific money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Oportun Financial Corporation (NASDAQ:OPRT). Citadel Investment Group had $0.4 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also made a $0.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Leonard A. Potter's Wildcat Capital Management, and Thomas Bailard's Bailard Inc.
Let's also examine hedge fund activity in other stocks similar to Oportun Financial Corporation (NASDAQ:OPRT). We will take a look at Calithera Biosciences Inc (NASDAQ:CALA), Peoples Financial Services Corp. (NASDAQ:PFIS), Tidewater Inc. (NYSE:TDW), and The Children's Place Inc. (NASDAQ:PLCE). This group of stocks' market valuations resemble OPRT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CALA,12,71096,-2 PFIS,1,3174,0 TDW,8,56765,-2 PLCE,18,93619,-7 Average,9.75,56164,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $3 million in OPRT's case. The Children's Place Inc. (NASDAQ:PLCE) is the most popular stock in this table. On the other hand Peoples Financial Services Corp. (NASDAQ:PFIS) is the least popular one with only 1 bullish hedge fund positions. Oportun Financial Corporation (NASDAQ:OPRT) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on OPRT as the stock returned 26.5% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.