Hedge funds are known to underperform the bull markets but that's not because they are bad at investing. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. Hedge funds underperform because they are hedged. The Standard and Poor’s 500 Index returned approximately 13.1% in the first 2.5 months of this year (including dividend payments). Conversely, hedge funds’ top 15 large-cap stock picks generated a return of 19.7% during the same 2.5-month period, with 93% of these stock picks outperforming the broader market benchmark. An average long/short hedge fund returned only 5% due to the hedges they implement and the large fees they charge. Our research covering the last 18 years indicates that investors can outperform the market by imitating hedge funds' stock picks rather than directly investing in hedge funds. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Oaktree Capital Group LLC (NYSE:OAK).
Hedge fund interest in Oaktree Capital Group LLC (NYSE:OAK) 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 OAK to other stocks including Voya Financial Inc (NYSE:VOYA), Berry Global Group Inc (NYSE:BERY), and Old Republic International Corporation (NYSE:ORI) to get a better sense of its popularity.
In today’s marketplace there are a lot of formulas stock market investors put to use to size up stocks. A duo of the most underrated formulas are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite money managers can outperform the market by a significant amount (see the details here).
We're going to take a look at the fresh hedge fund action surrounding Oaktree Capital Group LLC (NYSE:OAK).
How are hedge funds trading Oaktree Capital Group LLC (NYSE:OAK)?
At Q4's end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OAK over the last 14 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John W. Rogers's Ariel Investments has the largest position in Oaktree Capital Group LLC (NYSE:OAK), worth close to $80.3 million, accounting for 1.1% of its total 13F portfolio. The second largest stake is held by Markel Gayner Asset Management, led by Tom Gayner, holding a $40.6 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism comprise Chuck Royce's Royce & Associates, Murray Stahl's Horizon Asset Management and Mark Travis's Intrepid Capital Management.