The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Oclaro, Inc. (NASDAQ:OCLR) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is Oclaro, Inc. (NASDAQ:OCLR) a first-rate stock to buy now? Prominent investors are in a bullish mood. The number of long hedge fund positions rose by 3 in recent months. Our calculations also showed that OCLR isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's view the key hedge fund action regarding Oclaro, Inc. (NASDAQ:OCLR).
Hedge fund activity in Oclaro, Inc. (NASDAQ:OCLR)
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OCLR over the last 13 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Alec Litowitz and Ross Laser's Magnetar Capital has the most valuable position in Oclaro, Inc. (NASDAQ:OCLR), worth close to $75.9 million, corresponding to 1.4% of its total 13F portfolio. Coming in second is Robert Emil Zoellner of Alpine Associates, with a $31.1 million position; 0.9% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism consist of Jim Simons's Renaissance Technologies, Ken Griffin's Citadel Investment Group and Daniel Arbess's Perella Weinberg Partners.
As aggregate interest increased, specific money managers were leading the bulls' herd. Boardman Bay Capital Management, managed by Will Graves, initiated the biggest position in Oclaro, Inc. (NASDAQ:OCLR). Boardman Bay Capital Management had $0.4 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also initiated a $0.3 million position during the quarter. The following funds were also among the new OCLR investors: Michael Platt and William Reeves's BlueCrest Capital Mgmt., Israel Englander's Millennium Management, and Mario Gabelli's GAMCO Investors.
Let's also examine hedge fund activity in other stocks similar to Oclaro, Inc. (NASDAQ:OCLR). We will take a look at Oxford Industries, Inc. (NYSE:OXM), BJ's Restaurants, Inc. (NASDAQ:BJRI), Editas Medicine, Inc. (NASDAQ:EDIT), and First Busey Corporation (NASDAQ:BUSE). This group of stocks' market valuations match OCLR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OXM,13,70925,0 BJRI,20,195394,4 EDIT,17,148184,0 BUSE,14,52759,1 Average,16,116816,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $138 million in OCLR's case. BJ's Restaurants, Inc. (NASDAQ:BJRI) is the most popular stock in this table. On the other hand Oxford Industries, Inc. (NYSE:OXM) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Oclaro, Inc. (NASDAQ:OCLR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.