Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards OneMain Holdings Inc (NYSE:OMF) at the end of the third quarter and determine whether the smart money was really smart about this stock.
OneMain Holdings Inc (NYSE:OMF) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 41 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that OMF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare OMF to other stocks including Plains All American Pipeline, L.P. (NASDAQ:PAA), Companhia Siderurgica Nacional (NYSE:SID), and Polaris Inc. (NYSE:PII) to get a better sense of its popularity.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s take a peek at the latest hedge fund action surrounding OneMain Holdings Inc (NYSE:OMF).
Bill Miller of Miller Value Partners
Do Hedge Funds Think OMF Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OMF over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Arrowstreet Capital held the most valuable stake in OneMain Holdings Inc (NYSE:OMF), which was worth $147.1 million at the end of the third quarter. On the second spot was Basswood Capital which amassed $129.1 million worth of shares. Parsifal Capital Management, Miller Value Partners, and GoldenTree 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 Parsifal Capital Management allocated the biggest weight to OneMain Holdings Inc (NYSE:OMF), around 7.61% of its 13F portfolio. Second Curve Capital is also relatively very bullish on the stock, setting aside 5.53 percent of its 13F equity portfolio to OMF.
Since OneMain Holdings Inc (NYSE:OMF) has experienced falling interest from the smart money, we can see that there is a sect of hedgies that slashed their positions entirely by the end of the third quarter. It’s worth mentioning that Renaissance Technologies sold off the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth about $22.4 million in stock. Parvinder Thiara’s fund, Athanor Capital, also dumped its stock, about $17.4 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to OneMain Holdings Inc (NYSE:OMF). We will take a look at Plains All American Pipeline, L.P. (NASDAQ:PAA), Companhia Siderurgica Nacional (NYSE:SID), Polaris Inc. (NYSE:PII), Gildan Activewear Inc (NYSE:GIL), Rocket Lab USA Inc. (NASDAQ:RKLB), Dun & Bradstreet Holdings, Inc. (NYSE:DNB), and ShockWave Medical, Inc. (NASDAQ:SWAV). This group of stocks’ market valuations are closest to OMF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PAA | 7 | 51655 | 0 |
| SID | 11 | 46539 | -1 |
| PII | 15 | 287576 | -5 |
| GIL | 18 | 687770 | -1 |
| RKLB | 26 | 588996 | 26 |
| DNB | 33 | 627041 | -12 |
| SWAV | 25 | 264209 | -2 |
| Average | 19.3 | 364827 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $365 million. That figure was $1047 million in OMF’s case. Dun & Bradstreet Holdings, Inc. (NYSE:DNB) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NASDAQ:PAA) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks OneMain Holdings Inc (NYSE:OMF) is more popular among hedge funds. Our overall hedge fund sentiment score for OMF is 83.6. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, OMF wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OMF were disappointed as the stock returned -5.4% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Onemain Holdings Inc. (NYSE:OMF)
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Disclosure: None. This article was originally published at Insider Monkey.
