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Is Oasis Midstream Partners LP (OMP) Going to Burn These Hedge Funds?

Nina Todic

After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Oasis Midstream Partners LP (NYSE:OMP).

Oasis Midstream Partners LP (NYSE:OMP) was in 3 hedge funds' portfolios at the end of the third quarter of 2019. OMP has experienced a decrease in hedge fund interest of late. There were 5 hedge funds in our database with OMP positions at the end of the previous quarter. Our calculations also showed that OMP isn't among the 30 most popular stocks among hedge funds.

In the eyes of most stock holders, hedge funds are perceived as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, Our researchers look at the moguls of this group, approximately 750 funds. These hedge fund managers administer the majority of the smart money's total capital, and by tracking their top investments, Insider Monkey has formulated several investment strategies that have historically beaten the market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .

[caption id="attachment_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/caption]

Paul Marshall Marshall Wace

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's view the recent hedge fund action encompassing Oasis Midstream Partners LP (NYSE:OMP).

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

At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -40% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OMP over the last 17 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

No of Hedge Funds with OMP Positions

Among these funds, Marshall Wace held the most valuable stake in Oasis Midstream Partners LP (NYSE:OMP), which was worth $4 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $2.9 million worth of shares. EJF Capital was 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 EJF Capital allocated the biggest weight to Oasis Midstream Partners LP (NYSE:OMP), around 0.03% of its portfolio. Marshall Wace is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to OMP.

Due to the fact that Oasis Midstream Partners LP (NYSE:OMP) has witnessed falling interest from the entirety of the hedge funds we track, it's easy to see that there was a specific group of fund managers that slashed their entire stakes last quarter. At the top of the heap, Daniel Arbess's Perella Weinberg Partners dropped the biggest stake of all the hedgies tracked by Insider Monkey, worth close to $7 million in stock. Renaissance Technologies, also dropped its stock, about $1.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds last quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Oasis Midstream Partners LP (NYSE:OMP) but similarly valued. We will take a look at Party City Holdco Inc (NYSE:PRTY), First Community Bankshares, Inc. (NASDAQ:FCBC), Organigram Holdings Inc. (NASDAQ:OGI), and Contura Energy, Inc. (NYSE:CTRA). This group of stocks' market values match OMP's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRTY,10,77943,0 FCBC,8,12241,5 OGI,6,2915,1 CTRA,21,201571,-1 Average,11.25,73668,1.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $7 million in OMP's case. Contura Energy, Inc. (NYSE:CTRA) is the most popular stock in this table. On the other hand Organigram Holdings Inc. (NASDAQ:OGI) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Oasis Midstream Partners LP (NYSE:OMP) is even less popular than OGI. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. A small number of hedge funds were also right about betting on OMP, though not to the same extent, as the stock returned 5.1% during the fourth quarter (through 11/22) and outperformed the market as well.

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

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