Hedge Funds Aren’t Crazy About Owens-Illinois Inc (OI) Anymore

Since Owens-Illinois Inc (NYSE:OI) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedge funds that decided to sell off their entire stakes in the third quarter. At the top of the heap, Phill Gross and Robert Atchinson’s Adage Capital Management sold off the largest stake of the 700 funds watched by Insider Monkey, valued at an estimated $5.5 million in call options, and Brian Jackelow’s SAB Capital Management was right behind this move, as the fund said goodbye to about $4.6 million worth of options. These moves are important to note, as total hedge fund interest dropped by 11 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Owens-Illinois Inc (NYSE:OI) but similarly valued. We will take a look at Companhia Brasileira de Distrib. (ADR) (NYSE:CBD), Radian Group Inc (NYSE:RDN), Corelogic Inc (NYSE:CLGX), and ENSCO PLC (NYSE:ESV). All of these stocks’ market caps resemble OI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CBD 8 31216 -1
RDN 33 864463 2
CLGX 29 374931 2
ESV 29 297553 7

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $392 million. That figure was $814 million in OI’s case. Radian Group Inc (NYSE:RDN) is the most popular stock in this table, whereas Companhia Brasileira de Distrib. (ADR) (NYSE:CBD) is the laggard with only 8 bullish hedge fund positions. Owens-Illinois Inc (NYSE:OI) may not be the least popular stock in this group, but hedge fund interest is still below average and, since we see this as a slightly negative signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RDN might be a better candidate to consider a long position.