Hedge Funds Have Never Been This Bullish On Ollie’s Bargain Outlet Holdings, Inc. (OLLI)

Nina Todic

Mon, Oct 14, 2019, 6:58 PM

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. Insider Monkey finished processing more than 730 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of June 28th, 2019. In this article we are going to take a look at smart money sentiment towards Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI).

Is Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) ready to rally soon? Investors who are in the know are taking an optimistic view. The number of long hedge fund positions inched up by 9 recently. Our calculations also showed that OLLI isn't among the 30 most popular stocks among hedge funds.

According to most traders, hedge funds are perceived as slow, old investment tools of years past. While there are greater than 8000 funds with their doors open at the moment, Our researchers choose to focus on the masters of this club, around 750 funds. These money managers orchestrate the majority of all hedge funds' total capital, and by following their finest picks, Insider Monkey has revealed numerous investment strategies that have historically exceeded the broader indices. Insider Monkey's flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

Unlike some fund managers who are betting on Dow reaching 40000 in a year, 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 take a gander at the new hedge fund action regarding Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI).

Hedge fund activity in Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI)

At the end of the second quarter, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 41% from the first quarter of 2019. By comparison, 15 hedge funds held shares or bullish call options in OLLI a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Marshall Wace LLP held the most valuable stake in Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI), which was worth $66.5 million at the end of the second quarter. On the second spot was Millennium Management which amassed $39.2 million worth of shares. Moreover, Citadel Investment Group, D E Shaw, and Shellback Capital were also bullish on Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI), allocating a large percentage of their portfolios to this stock.

Consequently, key money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, assembled the largest position in Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI). Millennium Management had $39.2 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also initiated a $15.2 million position during the quarter. The other funds with brand new OLLI positions are Robert Pohly's Samlyn Capital, Louis Bacon's Moore Global Investments, and Paul Tudor Jones's Tudor Investment Corp.

Let's now review hedge fund activity in other stocks similar to Ollie's Bargain Outlet Holdings Inc (NASDAQ:OLLI). These stocks are Polaris Inc. (NYSE:PII), BOK Financial Corporation (NASDAQ:BOKF), Paylocity Holding Corporation (NASDAQ:PCTY), and JBG SMITH Properties (NYSE:JBGS). All of these stocks' market caps are similar to OLLI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PII,24,243800,8 BOKF,19,185832,3 PCTY,28,213289,4 JBGS,17,291239,0 Average,22,233540,3.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $234 million. That figure was $258 million in OLLI's case. Paylocity Holding Corporation (NASDAQ:PCTY) is the most popular stock in this table. On the other hand JBG SMITH Properties (NYSE:JBGS) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) is more popular among hedge funds. 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 OLLI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on OLLI were disappointed as the stock returned -32.7% 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 (view the video below) among hedge funds as many of these stocks already outperformed the market in Q3.