Is Opera Limited (NASDAQ:OPRA) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Opera Limited (NASDAQ:OPRA) was in 6 hedge funds' portfolios at the end of the second quarter of 2019. OPRA has experienced an increase in support from the world's most elite money managers recently. There were 5 hedge funds in our database with OPRA positions at the end of the previous quarter. Our calculations also showed that OPRA isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 40 percentage points since May 2014 through May 30, 2019 (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.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to check out the fresh hedge fund action regarding Opera Limited (NASDAQ:OPRA).
How have hedgies been trading Opera Limited (NASDAQ:OPRA)?
Heading into the third quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OPRA over the last 16 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Opera Limited (NASDAQ:OPRA) was held by Park West Asset Management, which reported holding $10.9 million worth of stock at the end of March. It was followed by CSat Investment Advisory with a $3.2 million position. Other investors bullish on the company included Sloane Robinson Investment Management, Manatuck Hill Partners, and Citadel Investment Group.
As one would reasonably expect, some big names have been driving this bullishness. Park West Asset Management, managed by Peter S. Park, initiated the biggest position in Opera Limited (NASDAQ:OPRA). Park West Asset Management had $10.9 million invested in the company at the end of the quarter. Mark Broach's Manatuck Hill Partners also made a $1.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Richard Driehaus's Driehaus Capital.
Let's go over hedge fund activity in other stocks similar to Opera Limited (NASDAQ:OPRA). We will take a look at G1 Therapeutics, Inc. (NASDAQ:GTHX), New Mountain Finance Corporation (NYSE:NMFC), National Bank Holdings Corporation (NYSE:NBHC), and Select Energy Services, Inc. (NYSE:WTTR). This group of stocks' market values are similar to OPRA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GTHX,10,47048,-1 NMFC,11,35819,2 NBHC,10,90981,2 WTTR,11,41118,-4 Average,10.5,53742,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $19 million in OPRA's case. New Mountain Finance Corporation (NYSE:NMFC) is the most popular stock in this table. On the other hand G1 Therapeutics, Inc. (NASDAQ:GTHX) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Opera Limited (NASDAQ:OPRA) is even less popular than GTHX. Hedge funds dodged a bullet by taking a bearish stance towards OPRA. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately OPRA wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); OPRA investors were disappointed as the stock returned -3.7% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.