Is Orion Energy Systems (OESX) a Smart Long-term Buy?

Heartland Value Fund recently released its third-quarter investor letter – a copy of which is available for download here. The fund posted a return of 6.6% for the quarter, outperforming its benchmark, the Russell 2000 Value Index which returned 2.6% in the same quarter. You should check out Heartland’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Heartland Advisors highlighted a few stocks and Orion Energy Systems Inc. (NASDAQ:OESX) is one of them. Orion Energy Systems Inc. (NASDAQ:OESX) is an American LED lighting and intelligent controls enterprise. Year-to-date, Orion Energy Systems Inc. (NASDAQ:OESX) stock gained 199% and on December 21st it had a closing price of $10.01. Here is what Heartland Advisors said:

“Industrials is another sector that has struggled to maintain traction and, despite a solid quarter, remains down double digits year to date. We’ve sought to capitalize on weakness in the space with holdings that are nimble and taking share from competitors. We’ve found one such example in our backyard, Manitowoc Wisconsin-based Orion Energy Systems Inc. (OESX).

Orion is an electrical supply company specializing in converting industrial and commercial properties to high-efficiency LED lighting solutions. Shares of the company have had an impressive run despite the COVID-19 selloff that hit many Industrial names. We view the company as a potential beneficiary of newly cost-conscious businesses.

The LED lights Orion installs are more efficient than the systems they replace, resulting in significant potential energy savings for customers. Additionally, the company enjoys a cost advantage through their use of an army of local contract electricians for installations. Their small size also allows management to be nimble in addressing new opportunities and adapting to the market.

A new CEO has beefed up Orion’s sales force that is focused on winning larger contracts. Management has cut costs and initiated new products like mold and mildew killing UV lights. Early results have been impressive with the company notching major wins including Prologis—the real estate investment trust that operates Amazon’s warehouses REIT.

Orion, in our view, should be able to build on recent momentum and gain additional market share in the LED lighting industry. We would not be surprised if the company landed numerous large contracts in the quarters ahead and saw its top and bottom line growth continue to move higher.”


In Q3 2020, the number of bullish hedge fund positions on Orion Energy Systems Inc. (NASDAQ:OESX) stock increased by about 17% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Orion’s growth potential. Our calculations showed that Orion Energy Systems Inc. (NASDAQ:OESX) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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