The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards O-I Glass, Inc. (NYSE:OI).
Is OI a good stock to buy now? The best stock pickers were becoming less confident. The number of long hedge fund positions dropped by 2 recently. O-I Glass, Inc. (NYSE:OI) was in 23 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that OI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 25 hedge funds in our database with OI holdings at the end of December.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
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. Keeping this in mind we’re going to view the recent hedge fund action regarding O-I Glass, Inc. (NYSE:OI).
Do Hedge Funds Think OI Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OI over the last 23 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, David Abrams’s Abrams Capital Management has the largest position in O-I Glass, Inc. (NYSE:OI), worth close to $102.2 million, comprising 2.3% of its total 13F portfolio. The second most bullish fund manager is Lyrical Asset Management, managed by Andrew Wellington and Jeff Keswin, which holds a $100.5 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’s AQR Capital Management and Alexander Roepers’s Atlantic Investment Management. In terms of the portfolio weights assigned to each position Atlantic Investment Management allocated the biggest weight to O-I Glass, Inc. (NYSE:OI), around 5.46% of its 13F portfolio. Abrams Capital Management is also relatively very bullish on the stock, designating 2.3 percent of its 13F equity portfolio to OI.
Due to the fact that O-I Glass, Inc. (NYSE:OI) has faced falling interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers that slashed their full holdings last quarter. It’s worth mentioning that Israel Englander’s Millennium Management said goodbye to the biggest investment of the 750 funds monitored by Insider Monkey, worth an estimated $6.4 million in stock, and Clint Murray’s Lodge Hill Capital was right behind this move, as the fund cut about $5.5 million worth. These transactions are interesting, as total hedge fund interest was cut by 2 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as O-I Glass, Inc. (NYSE:OI) but similarly valued. These stocks are Federal Signal Corporation (NYSE:FSS), Sorrento Therapeutics Inc (NASDAQ:SRNE), E2open Parent Holdings, Inc. (NYSE:ETWO), The ODP Corporation (NASDAQ:ODP), Hub Group Inc (NASDAQ:HUBG), BancFirst Corporation (NASDAQ:BANF), and Cactus, Inc. (NYSE:WHD). This group of stocks’ market valuations are closest to OI’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $265 million. That figure was $322 million in OI’s case. E2open Parent Holdings, Inc. (NYSE:ETWO) is the most popular stock in this table. On the other hand BancFirst Corporation (NASDAQ:BANF) is the least popular one with only 4 bullish hedge fund positions. O-I Glass, Inc. (NYSE:OI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OI is 56.6. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately OI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OI were disappointed as the stock returned 2.1% 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.
Follow O-I Glass Inc. (NYSE:OI)
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Disclosure: None. This article was originally published at Insider Monkey.