Did Hedge Funds Make The Right Call On OraSure Technologies, Inc. (OSUR) ?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded OraSure Technologies, Inc. (NASDAQ:OSUR) and determine whether the smart money was really smart about this stock.

OraSure Technologies, Inc. (NASDAQ:OSUR) has experienced an increase in support from the world’s most elite money managers in recent months. Our calculations also showed that OSUR isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

In the eyes of most investors, hedge funds are assumed to be worthless, outdated financial tools of years past. While there are more than 8000 funds trading at the moment, Our experts hone in on the bigwigs of this club, approximately 850 funds. These investment experts manage bulk of the hedge fund industry’s total capital, and by following their unrivaled investments, Insider Monkey has come up with numerous investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .


Ken Fisher of Fisher Asset Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in the world 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now we’re going to go over the key hedge fund action surrounding OraSure Technologies, Inc. (NASDAQ:OSUR).

How are hedge funds trading OraSure Technologies, Inc. (NASDAQ:OSUR)?

Heading into the second quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OSUR over the last 18 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 OSUR A Good Stock To Buy?

Among these funds, Renaissance Technologies held the most valuable stake in OraSure Technologies, Inc. (NASDAQ:OSUR), which was worth $40.9 million at the end of the third quarter. On the second spot was D E Shaw which amassed $31.9 million worth of shares. Two Sigma Advisors, Archon Capital Management, and Fisher Asset 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 Archon Capital Management allocated the biggest weight to OraSure Technologies, Inc. (NASDAQ:OSUR), around 1.2% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, designating 0.86 percent of its 13F equity portfolio to OSUR.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Archon Capital Management, managed by Constantinos J. Christofilis, initiated the biggest position in OraSure Technologies, Inc. (NASDAQ:OSUR). Archon Capital Management had $3.3 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $3.1 million investment in the stock during the quarter. The following funds were also among the new OSUR investors: Efrem Kamen’s Pura Vida Investments, Michael Gelband’s ExodusPoint Capital, and Israel Englander’s Millennium Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as OraSure Technologies, Inc. (NASDAQ:OSUR) but similarly valued. These stocks are GMS Inc. (NYSE:GMS), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), MAG Silver Corporation (NYSE:MAG), and JinkoSolar Holding Co., Ltd. (NYSE:JKS). All of these stocks’ market caps resemble OSUR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GMS 16 73933 -1
AAWW 17 57222 2
MAG 8 80264 -2
JKS 7 41159 -5
Average 12 63145 -1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $96 million in OSUR’s case. Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is the most popular stock in this table. On the other hand JinkoSolar Holding Co., Ltd. (NYSE:JKS) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks OraSure Technologies, Inc. (NASDAQ:OSUR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 18.6% in 2020 through July 27th but still managed to beat the market by 17.1 percentage points. Hedge funds were also right about betting on OSUR as the stock returned 64.5% since Q1 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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