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 June 28. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Oppenheimer Holdings Inc. (NYSE:OPY).
Hedge fund interest in Oppenheimer Holdings Inc. (NYSE:OPY) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare OPY to other stocks including Digi International Inc. (NASDAQ:DGII), Guaranty Bancshares, Inc. (NASDAQ:GNTY), and Exantas Capital Corp. (NYSE:XAN) to get a better sense of its popularity. Video: Click the image to 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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. Let's check out the latest hedge fund action encompassing Oppenheimer Holdings Inc. (NYSE:OPY).
How are hedge funds trading Oppenheimer Holdings Inc. (NYSE:OPY)?
At Q2's end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in OPY a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the most valuable position in Oppenheimer Holdings Inc. (NYSE:OPY). Renaissance Technologies has a $12.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is GLG Partners, led by Noam Gottesman, holding a $8.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Cliff Asness's AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and John Overdeck and David Siegel's Two Sigma Advisors.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: PEAK6 Capital Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let's also examine hedge fund activity in other stocks similar to Oppenheimer Holdings Inc. (NYSE:OPY). These stocks are Digi International Inc. (NASDAQ:DGII), Guaranty Bancshares, Inc. (NASDAQ:GNTY), Exantas Capital Corp. (NYSE:XAN), and Citizens & Northern Corporation (NASDAQ:CZNC). This group of stocks' market valuations resemble OPY's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DGII,13,47047,-2 GNTY,3,3672,-1 XAN,16,64628,-1 CZNC,2,7044,-1 Average,8.5,30598,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $36 million in OPY's case. Exantas Capital Corp. (NYSE:XAN) is the most popular stock in this table. On the other hand Citizens & Northern Corporation (NASDAQ:CZNC) is the least popular one with only 2 bullish hedge fund positions. Oppenheimer Holdings Inc. (NYSE:OPY) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on OPY as the stock returned 10.9% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.