Should You Also Consider Investing in Omnicell (OMCL)?

ClearBridge Investments, an investment management firm, published its “SMID Cap Growth Strategy” second quarter 2021 investor letter – a copy of which can be downloaded here. During the second quarter, the ClearBridge SMID Cap Growth Strategy outperformed the benchmark Russell 2500 Growth Index. On an absolute basis, the Strategy had gains across nine of the 10 sectors in which it was invested during the quarter (out of 11 sectors total), with the IT, health care, and industrials sectors the leading contributors. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.

In the Q2 2021 investor letter of ClearBridge Investments, the fund mentioned Omnicell, Inc. (NASDAQ: OMCL) and discussed its stance on the firm. Omnicell, Inc. is a Mountain View, California-based healthcare technology company with a $6.6 billion market capitalization. OMCL delivered a 27.70% return since the beginning of the year, while its 12-month returns are up by 107.53%. The stock closed at $153.26 per share on October 01, 2021.

Here is what ClearBridge Investments has to say about Omnicell, Inc. in its Q2 2021 investor letter:

“Other new buys included Omnicell. Omnicell, in the health care sector, is a leading participant in the automation of patient care through management of medication distribution across various points in the healthcare system, from operating rooms to nursing homes and health system pharmacies.”


Based on our calculations, Omnicell, Inc. (NASDAQ: OMCL) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. OMCL was in 18 hedge fund portfolios at the end of the first half of 2021, compared to 19 funds in the previous quarter. Omnicell, Inc. (NASDAQ: OMCL) delivered a 2.34% return in the past 3 months.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

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Disclosure: None. This article is originally published at Insider Monkey.