Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Universal Display Corporation (NASDAQ:OLED) based on that data and determine whether they were really smart about the stock.
Is Universal Display Corporation (NASDAQ:OLED) going to take off soon? Money managers were getting more optimistic. The number of bullish hedge fund bets advanced by 1 in recent months. Universal Display Corporation (NASDAQ:OLED) was in 25 hedge funds’ portfolios at the end of June. The all time high for this statistics is 33. Our calculations also showed that OLED isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we’re going to check out the key hedge fund action encompassing Universal Display Corporation (NASDAQ:OLED).
What does smart money think about Universal Display Corporation (NASDAQ:OLED)?
At the end of the second quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in OLED over the last 20 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Universal Display Corporation (NASDAQ:OLED) was held by Renaissance Technologies, which reported holding $115.6 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $47 million position. Other investors bullish on the company included Alyeska Investment Group, Two Sigma Advisors, and PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Tegean Capital Management allocated the biggest weight to Universal Display Corporation (NASDAQ:OLED), around 2.15% of its 13F portfolio. Thames Capital Management is also relatively very bullish on the stock, dishing out 1.12 percent of its 13F equity portfolio to OLED.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Thames Capital Management, managed by Jay Genzer, established the most valuable position in Universal Display Corporation (NASDAQ:OLED). Thames Capital Management had $2.9 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $2.4 million position during the quarter. The other funds with new positions in the stock are Jinghua Yan’s TwinBeech Capital, Donald Sussman’s Paloma Partners, and Qing Li’s Sciencast Management.
Let’s check out hedge fund activity in other stocks similar to Universal Display Corporation (NASDAQ:OLED). These stocks are XPO Logistics Inc (NYSE:XPO), News Corp (NASDAQ:NWS), The New York Times Company (NYSE:NYT), Aspen Technology, Inc. (NASDAQ:AZPN), Alleghany Corporation (NYSE:Y), News Corp (NASDAQ:NWSA), and Genpact Limited (NYSE:G). All of these stocks’ market caps are similar to OLED’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XPO | 40 | 2294370 | 4 |
| NWS | 16 | 32230 | 3 |
| NYT | 42 | 1853275 | 9 |
| AZPN | 28 | 878045 | 8 |
| Y | 31 | 270939 | 6 |
| NWSA | 24 | 342184 | -4 |
| G | 29 | 319870 | -5 |
| Average | 30 | 855845 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $856 million. That figure was $217 million in OLED’s case. The New York Times Company (NYSE:NYT) is the most popular stock in this table. On the other hand News Corp (NASDAQ:NWS) is the least popular one with only 16 bullish hedge fund positions. Universal Display Corporation (NASDAQ:OLED) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OLED is 46. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. A small number of hedge funds were also right about betting on OLED as the stock returned 15.1% since the end of June (through September 25th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
