Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Owens & Minor, Inc. (NYSE:OMI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is OMI a good stock to buy now? Owens & Minor, Inc. (NYSE:OMI) investors should pay attention to an increase in activity from the world's largest hedge funds recently. Owens & Minor, Inc. (NYSE:OMI) was in 19 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. There were 15 hedge funds in our database with OMI positions at the end of the second quarter. Our calculations also showed that OMI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are numerous metrics stock market investors can use to assess stocks. Some of the best metrics are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can trounce their index-focused peers by a healthy margin (see the details here).
Richard Driehaus of Driehaus Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we're going to review the recent hedge fund action encompassing Owens & Minor, Inc. (NYSE:OMI).
Do Hedge Funds Think OMI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in OMI over the last 21 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Owens & Minor, Inc. (NYSE:OMI), with a stake worth $76.7 million reported as of the end of September. Trailing Renaissance Technologies was Deerfield Management, which amassed a stake valued at $37.1 million. Royce & Associates, D E Shaw, and Millennium Management 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 Sivik Global Healthcare allocated the biggest weight to Owens & Minor, Inc. (NYSE:OMI), around 1.35% of its 13F portfolio. Deerfield Management is also relatively very bullish on the stock, dishing out 0.9 percent of its 13F equity portfolio to OMI.
Now, key money managers were leading the bulls' herd. Millennium Management, managed by Israel Englander, established the most valuable position in Owens & Minor, Inc. (NYSE:OMI). Millennium Management had $19.1 million invested in the company at the end of the quarter. Richard Driehaus's Driehaus Capital also made a $8.4 million investment in the stock during the quarter. The following funds were also among the new OMI investors: Greg Eisner's Engineers Gate Manager, Jonathan Soros's JS Capital, and Dmitry Balyasny's Balyasny Asset Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Owens & Minor, Inc. (NYSE:OMI) but similarly valued. These stocks are Enviva Partners, LP (NYSE:EVA), Albany International Corp. (NYSE:AIN), Vital Farms, Inc. (NASDAQ:VITL), ChampionX Corporation (NYSE:CHX), PennyMac Mortgage Investment Trust (NYSE:PMT), Cooper Tire & Rubber Company (NYSE:CTB), and Ameresco Inc (NYSE:AMRC). This group of stocks' market values are similar to OMI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EVA,6,44281,-2 AIN,17,46431,-2 VITL,11,58142,11 CHX,27,383178,-3 PMT,19,56218,4 CTB,23,161958,5 AMRC,8,56869,-5 Average,15.9,115297,1.1 [/table]
As you can see these stocks had an average of 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $233 million in OMI's case. ChampionX Corporation (NYSE:CHX) is the most popular stock in this table. On the other hand Enviva Partners, LP (NYSE:EVA) is the least popular one with only 6 bullish hedge fund positions. Owens & Minor, Inc. (NYSE:OMI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OMI is 68.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on OMI, though not to the same extent, as the stock returned 9.6% since Q3 (through December 14th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
