Hedge Funds Are Coming Back To OGE Energy Corp. (OGE)

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about OGE Energy Corp. (NYSE:OGE).

OGE Energy Corp. (NYSE:OGE) shareholders have witnessed an increase in hedge fund sentiment in recent months. OGE Energy Corp. (NYSE:OGE) was in 23 hedge funds’ portfolios at the end of March. The all time high for this statistic is 25. There were 20 hedge funds in our database with OGE positions at the end of the fourth quarter. Our calculations also showed that OGE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

To the average investor there are a large number of indicators shareholders can use to size up stocks. Two of the most useful indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outclass the S&P 500 by a very impressive amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Gavin Saitowitz of Prelude Capital

Gavin Saitowitz of Prelude Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. With all of this in mind we’re going to take a glance at the fresh hedge fund action regarding OGE Energy Corp. (NYSE:OGE).

Do Hedge Funds Think OGE Is A Good Stock To Buy Now?

At the end of March, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the fourth quarter of 2020. By comparison, 21 hedge funds held shares or bullish call options in OGE a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in OGE Energy Corp. (NYSE:OGE) was held by Renaissance Technologies, which reported holding $28.2 million worth of stock at the end of December. It was followed by D E Shaw with a $27.4 million position. Other investors bullish on the company included AQR Capital Management, Two Sigma Advisors, and Point72 Asset Management. In terms of the portfolio weights assigned to each position Engineers Gate Manager allocated the biggest weight to OGE Energy Corp. (NYSE:OGE), around 0.15% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, earmarking 0.08 percent of its 13F equity portfolio to OGE.

Consequently, specific money managers have jumped into OGE Energy Corp. (NYSE:OGE) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most valuable position in OGE Energy Corp. (NYSE:OGE). Marshall Wace LLP had $1.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $1 million position during the quarter. The other funds with brand new OGE positions are Matthew Hulsizer’s PEAK6 Capital Management, Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital), and Peter Muller’s PDT Partners.

Let’s check out hedge fund activity in other stocks similar to OGE Energy Corp. (NYSE:OGE). These stocks are JetBlue Airways Corporation (NASDAQ:JBLU), Ritchie Bros. Auctioneers Incorporated (NYSE:RBA), Pacific Biosciences of California, Inc. (NASDAQ:PACB), FirstService Corporation (NASDAQ:FSV), Huntsman Corporation (NYSE:HUN), eXp World Holdings, Inc. (NASDAQ:EXPI), and Apartment Income REIT Corp. (NYSE:AIRC). All of these stocks’ market caps are closest to OGE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
JBLU 29 425689 0
RBA 19 345121 -4
PACB 24 1492893 1
FSV 17 238970 1
HUN 35 735950 6
EXPI 15 171695 -5
AIRC 14 210803 -3
Average 21.9 517303 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $517 million. That figure was $120 million in OGE’s case. Huntsman Corporation (NYSE:HUN) is the most popular stock in this table. On the other hand Apartment Income REIT Corp. (NYSE:AIRC) is the least popular one with only 14 bullish hedge fund positions. OGE Energy Corp. (NYSE:OGE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OGE is 57. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately OGE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OGE were disappointed as the stock returned 8.4% since the end of March (through 7/16) 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 many of these stocks already outperformed the market since 2019.

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