Hedge Funds Cautiously Buying Organigram Holdings Inc. (OGI)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Organigram Holdings Inc. (NASDAQ:OGI).

Organigram Holdings Inc. (NASDAQ:OGI) investors should be aware of an increase in enthusiasm from smart money recently. Our calculations also showed that OGI 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 market participants, hedge funds are viewed as worthless, old financial vehicles of years past. While there are greater than 8000 funds trading at present, Our researchers choose to focus on the crème de la crème of this club, approximately 850 funds. These money managers command bulk of the hedge fund industry’s total asset base, and by keeping track of their first-class investments, Insider Monkey has formulated several investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per 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 .


Joel Greenblatt of Gotham Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the latest hedge fund action surrounding Organigram Holdings Inc. (NASDAQ:OGI).

What have hedge funds been doing with Organigram Holdings Inc. (NASDAQ:OGI)?

At the end of the first quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 40% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards OGI over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

The largest stake in Organigram Holdings Inc. (NASDAQ:OGI) was held by D E Shaw, which reported holding $0.7 million worth of stock at the end of September. It was followed by Ancora Advisors with a $0.6 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and OZ Management. In terms of the portfolio weights assigned to each position Ancora Advisors allocated the biggest weight to Organigram Holdings Inc. (NASDAQ:OGI), around 0.03% of its 13F portfolio. OZ Management is also relatively very bullish on the stock, dishing out 0.0034 percent of its 13F equity portfolio to OGI.

As aggregate interest increased, key money managers have been driving this bullishness. D E Shaw, managed by D. E. Shaw, initiated the most valuable position in Organigram Holdings Inc. (NASDAQ:OGI). D E Shaw had $0.7 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $0.5 million position during the quarter. The only other fund with a brand new OGI position is Joel Greenblatt’s Gotham Asset Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Organigram Holdings Inc. (NASDAQ:OGI) but similarly valued. We will take a look at Customers Bancorp Inc (NYSE:CUBI), Preferred Apartment Communities Inc. (NYSE:APTS), Hemisphere Media Group Inc (NASDAQ:HMTV), and SI-BONE, Inc. (NASDAQ:SIBN). This group of stocks’ market valuations are similar to OGI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CUBI 13 25069 -3
APTS 9 7482 0
HMTV 9 26404 1
SIBN 19 77588 12
Average 12.5 34136 2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $3 million in OGI’s case. SI-BONE, Inc. (NASDAQ:SIBN) is the most popular stock in this table. On the other hand Preferred Apartment Communities Inc. (NYSE:APTS) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Organigram Holdings Inc. (NASDAQ:OGI) is even less popular than APTS. Hedge funds dodged a bullet by taking a bearish stance towards OGI. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately OGI wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); OGI investors were disappointed as the stock returned 9% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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