Hedge Funds Are Piling Into ON24, Inc. (ONTF)

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards ON24, Inc. (NYSE:ONTF) changed recently.

Is ON24, Inc. (NYSE:ONTF) a buy right now? Hedge funds were becoming hopeful. The number of bullish hedge fund positions increased by 8 lately. ON24, Inc. (NYSE:ONTF) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ONTF isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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 we’re going to take a glance at the fresh hedge fund action regarding ON24, Inc. (NYSE:ONTF).

Wall Street Bull

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

Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 62% from the second quarter of 2021. On the other hand, there were a total of 0 hedge funds with a bullish position in ONTF a year ago. 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, Indaba Capital Management held the most valuable stake in ON24, Inc. (NYSE:ONTF), which was worth $47.3 million at the end of the third quarter. On the second spot was Tiger Global Management LLC which amassed $45.1 million worth of shares. Lynrock Lake, Jasper Ridge Partners, and Washington Harbour Partners 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 Indaba Capital Management allocated the biggest weight to ON24, Inc. (NYSE:ONTF), around 5.01% of its 13F portfolio. Hunt Lane Capital is also relatively very bullish on the stock, dishing out 3.91 percent of its 13F equity portfolio to ONTF.

As aggregate interest increased, some big names have been driving this bullishness. Indaba Capital Management, managed by Derek C. Schrier, established the most valuable position in ON24, Inc. (NYSE:ONTF). Indaba Capital Management had $47.3 million invested in the company at the end of the quarter. Cynthia Paul’s Lynrock Lake also initiated a $36.1 million position during the quarter. The other funds with new positions in the stock are Mark Wolfson and Jamie Alexander’s Jasper Ridge Partners, Mina Faltas’s Washington Harbour Partners, and John Brennan’s Sirios Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as ON24, Inc. (NYSE:ONTF) but similarly valued. These stocks are Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX), Amerant Bancorp Inc. (NASDAQ:AMTB), Byline Bancorp, Inc. (NYSE:BY), Weber Inc. (NYSE:WEBR), International Seaways, Inc. (NYSE:INSW), Keros Therapeutics, Inc. (NASDAQ:KROS), and Forestar Group Inc. (NYSE:FOR). This group of stocks’ market caps are closest to ONTF’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SNDX 28 431533 3
AMTB 12 36622 2
BY 13 48025 0
WEBR 10 57164 10
INSW 14 107413 -1
KROS 17 178057 4
FOR 12 107711 -2
Average 15.1 138075 2.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $226 million in ONTF’s case. Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) is the most popular stock in this table. On the other hand Weber Inc. (NYSE:WEBR) is the least popular one with only 10 bullish hedge fund positions. ON24, Inc. (NYSE:ONTF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ONTF is 70.6. 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. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately ONTF wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ONTF were disappointed as the stock returned -13% since the end of September (through 12/31) 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 many of these stocks already outperformed the market since 2019.

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