In this article we will check out the progression of hedge fund sentiment towards Ocean Bio-Chem, Inc. (NASDAQ:OBCI) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is OBCI a good stock to buy? Ocean Bio-Chem, Inc. (NASDAQ:OBCI) has experienced a decrease in enthusiasm from smart money of late. Ocean Bio-Chem, Inc. (NASDAQ:OBCI) was in 3 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 4. There were 4 hedge funds in our database with OBCI positions at the end of the fourth quarter. Our calculations also showed that OBCI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Fred DiSanto Ancora Advisors
Fred DiSanto of Ancora Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stockfor $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we're going to take a look at the new hedge fund action surrounding Ocean Bio-Chem, Inc. (NASDAQ:OBCI).
Do Hedge Funds Think OBCI Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in OBCI over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Is OBCI A Good Stock To Buy?
More specifically, Renaissance Technologies was the largest shareholder of Ocean Bio-Chem, Inc. (NASDAQ:OBCI), with a stake worth $3.1 million reported as of the end of March. Trailing Renaissance Technologies was Ancora Advisors, which amassed a stake valued at $1.5 million. AltraVue Capital was 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 AltraVue Capital allocated the biggest weight to Ocean Bio-Chem, Inc. (NASDAQ:OBCI), around 0.31% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, designating 0.04 percent of its 13F equity portfolio to OBCI.
Judging by the fact that Ocean Bio-Chem, Inc. (NASDAQ:OBCI) has experienced bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there lies a certain "tier" of fund managers who were dropping their full holdings by the end of the first quarter. Intriguingly, Orin Hirschman's AIGH Investment Partners dropped the biggest investment of all the hedgies watched by Insider Monkey, totaling about $8.2 million in stock. Israel Englander's fund, Millennium Management, also sold off its stock, about $0.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds by the end of the first quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Ocean Bio-Chem, Inc. (NASDAQ:OBCI) but similarly valued. We will take a look at Caladrius Biosciences Inc (NASDAQ:CLBS), Allied Esports Entertainment, Inc. (NASDAQ:AESE), Regulus Therapeutics Inc (NASDAQ:RGLS), Beyond Air, Inc. (NASDAQ:XAIR), Evolution Petroleum Corporation (NYSE:EPM), Blue Apron Holdings, Inc. (NYSE:APRN), and LEAP THERAPEUTICS, INC. (NASDAQ:LPTX). This group of stocks' market values are similar to OBCI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLBS,5,3949,2 AESE,2,414,0 RGLS,6,14908,2 XAIR,5,6015,1 EPM,9,10311,-1 APRN,9,3349,1 LPTX,10,28533,-2 Average,6.6,9640,0.4 [/table]
As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $5 million in OBCI's case. LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) is the most popular stock in this table. On the other hand Allied Esports Entertainment, Inc. (NASDAQ:AESE) is the least popular one with only 2 bullish hedge fund positions. Ocean Bio-Chem, Inc. (NASDAQ:OBCI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OBCI is 32.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on OBCI, though not to the same extent, as the stock returned 7.5% since the end of Q1 (through June 11th) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
