At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not One Liberty Properties, Inc. (NYSE:OLP) makes for a good investment right now.
Is One Liberty Properties, Inc. (NYSE:OLP) an outstanding stock to buy now? Investors who are in the know are buying. The number of bullish hedge fund bets advanced by 1 in recent months. Our calculations also showed that OLP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
[caption id="attachment_189632" align="aligncenter" width="600"] David Harding of Winton Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. With all of this in mind we're going to take a gander at the latest hedge fund action encompassing One Liberty Properties, Inc. (NYSE:OLP).
Hedge fund activity in One Liberty Properties, Inc. (NYSE:OLP)
At Q3's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in OLP over the last 17 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of One Liberty Properties, Inc. (NYSE:OLP), with a stake worth $28.2 million reported as of the end of September. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $0.9 million. Winton Capital Management, Two Sigma Advisors, and Bailard Inc 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 Renaissance Technologies allocated the biggest weight to One Liberty Properties, Inc. (NYSE:OLP), around 0.02% of its 13F portfolio. Bailard Inc is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to OLP.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, assembled the largest position in One Liberty Properties, Inc. (NYSE:OLP). Citadel Investment Group had $0.9 million invested in the company at the end of the quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as One Liberty Properties, Inc. (NYSE:OLP) but similarly valued. We will take a look at Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX), Team, Inc. (NYSE:TISI), Antares Pharma Inc (NASDAQ:ATRS), and Peapack-Gladstone Financial Corp (NASDAQ:PGC). This group of stocks' market values are closest to OLP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CPRX,12,124014,2 TISI,13,89501,1 ATRS,11,27672,1 PGC,16,59858,1 Average,13,75261,1.25 [/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 $75 million. That figure was $30 million in OLP's case. Peapack-Gladstone Financial Corp (NASDAQ:PGC) is the most popular stock in this table. On the other hand Antares Pharma Inc (NASDAQ:ATRS) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks One Liberty Properties, Inc. (NYSE:OLP) is even less popular than ATRS. Hedge funds dodged a bullet by taking a bearish stance towards OLP. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately OLP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); OLP investors were disappointed as the stock returned -0.8% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.