Is Oxford Industries, Inc. (NYSE:OXM) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Oxford Industries, Inc. (NYSE:OXM) was in 13 hedge funds' portfolios at the end of the second quarter of 2019. OXM investors should be aware of an increase in support from the world's most elite money managers recently. There were 11 hedge funds in our database with OXM positions at the end of the previous quarter. Our calculations also showed that OXM 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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. Let's review the fresh hedge fund action encompassing Oxford Industries, Inc. (NYSE:OXM).
Hedge fund activity in Oxford Industries, Inc. (NYSE:OXM)
Heading into the third quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in OXM a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Cardinal Capital was the largest shareholder of Oxford Industries, Inc. (NYSE:OXM), with a stake worth $36.9 million reported as of the end of March. Trailing Cardinal Capital was Millennium Management, which amassed a stake valued at $22.2 million. Arrowstreet Capital, Marshall Wace LLP, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, specific money managers were leading the bulls' herd. Millennium Management, managed by Israel Englander, created the most outsized position in Oxford Industries, Inc. (NYSE:OXM). Millennium Management had $22.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $8.6 million investment in the stock during the quarter. The other funds with brand new OXM positions are Paul Tudor Jones's Tudor Investment Corp, Hoon Kim's Quantinno Capital, and Chuck Royce's Royce & Associates.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Oxford Industries, Inc. (NYSE:OXM) but similarly valued. These stocks are Summit Hotel Properties Inc (NYSE:INN), Veracyte Inc (NASDAQ:VCYT), Bright Scholar Education Holdings Limited (NYSE:BEDU), and Marcus & Millichap Inc (NYSE:MMI). This group of stocks' market values resemble OXM's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position INN,12,12907,2 VCYT,24,145196,2 BEDU,9,72225,0 MMI,12,96656,0 Average,14.25,81746,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $93 million in OXM's case. Veracyte Inc (NASDAQ:VCYT) is the most popular stock in this table. On the other hand Bright Scholar Education Holdings Limited (NYSE:BEDU) is the least popular one with only 9 bullish hedge fund positions. Oxford Industries, Inc. (NYSE:OXM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately OXM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); OXM investors were disappointed as the stock returned -4.9% 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