Here is What Hedge Funds Think About OM Group, Inc. (OMG)
What's smart OM Group, Inc. (NYSE:OMG) investor to do?
If you were to ask many investors, hedge funds are seen as overrated, old financial tools of a period lost to current times. Although there are over 8,000 hedge funds in operation currently, Insider Monkey focuses on the elite of this group, about 525 funds. It is widely held that this group controls the lion's share of the hedge fund industry's total assets, and by tracking their highest performing stock picks, we've formulated a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, positive insider trading sentiment is a second way to analyze the world of equities. As the old adage goes: there are many reasons for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).
Now that that's out of the way, let's examine the latest info for OM Group, Inc. (NYSE:OMG).
How have hedgies been trading OM Group, Inc. (NYSE:OMG)?
At Q2's end, a total of 17 of the hedge funds we track held long positions in this stock, a change of -11% from the first quarter. With hedgies' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings significantly.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in OM Group, Inc. (NYSE:OMG). Royce & Associates has a $32.9 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $7.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Alexander Mitchell's Scopus Asset Management.
Due to the fact OM Group, Inc. (NYSE:OMG) has faced bearish sentiment from upper-tier hedge fund managers, logic holds that there lies a certain "tier" of money managers that elected to cut their positions entirely in Q1. Interestingly, Gilchrist Berg's Water Street Capital cut the largest stake of the 450+ funds we key on, worth close to $7.3 million in stock, and Stephen Loukas David A. Lorber Zachary George of FrontFour Capital Group was right behind this move, as the fund cut about $2.1 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds in Q1.
What have insiders been doing with OM Group, Inc. (NYSE:OMG)?
Insider buying is best served when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, OM Group, Inc. (NYSE:OMG) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to OM Group, Inc. (NYSE:OMG). These stocks are Koppers Holdings Inc. (NYSE:KOP), WD-40 Company (NASDAQ:WDFC), Flotek Industries Inc (NYSE:FTK), Quaker Chemical Corp (NYSE:KWR), and Kraton Performance Polymers Inc (NYSE:KRA). This group of stocks are the members of the specialty chemicals industry and their market caps match OMG's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Koppers Holdings Inc. (NYSE:KOP)
WD-40 Company (NASDAQ:WDFC)
Flotek Industries Inc (NYSE:FTK)
Quaker Chemical Corp (NYSE:KWR)
Kraton Performance Polymers Inc (NYSE:KRA)
Using the results shown by Insider Monkey's tactics, average investors must always watch hedge fund and insider trading sentiment, and OM Group, Inc. (NYSE:OMG) shareholders fit into this picture quite nicely.