Is OSIS A Good Stock To Buy Now?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. 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 OSI Systems, Inc. (NASDAQ:OSIS).

Is OSIS a good stock to buy now? The smart money was turning bullish. The number of bullish hedge fund positions went up by 4 lately. OSI Systems, Inc. (NASDAQ:OSIS) was in 17 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 25. Our calculations also showed that OSIS isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.

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Ian Wace Marshall Wace

Ian Wace of Marshall Wace

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Keeping this in mind let’s take a gander at the key hedge fund action regarding OSI Systems, Inc. (NASDAQ:OSIS).

Do Hedge Funds Think OSIS Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 31% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards OSIS over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Cardinal Capital was the largest shareholder of OSI Systems, Inc. (NASDAQ:OSIS), with a stake worth $18 million reported as of the end of September. Trailing Cardinal Capital was Renaissance Technologies, which amassed a stake valued at $12.7 million. Arrowstreet Capital, Marshall Wace LLP, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to OSI Systems, Inc. (NASDAQ:OSIS), around 1.22% of its 13F portfolio. Cardinal Capital is also relatively very bullish on the stock, designating 0.75 percent of its 13F equity portfolio to OSIS.

As industrywide interest jumped, specific money managers have jumped into OSI Systems, Inc. (NASDAQ:OSIS) headfirst. Cardinal Capital, managed by Amy Minella, created the biggest position in OSI Systems, Inc. (NASDAQ:OSIS). Cardinal Capital had $18 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $1.6 million investment in the stock during the quarter. The other funds with brand new OSIS positions are Roger Ibbotson’s Zebra Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Israel Englander’s Millennium Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as OSI Systems, Inc. (NASDAQ:OSIS) but similarly valued. We will take a look at Freedom Holding Corp. (NASDAQ:FRHC), PQ Group Holdings Inc. (NYSE:PQG), ALX Oncology Holdings Inc. (NASDAQ:ALXO), Two Harbors Investment Corp (NYSE:TWO), Axos Financial, Inc. (NYSE:AX), Mednax Inc. (NYSE:MD), and SITE Centers Corp. (NYSE:SITC). This group of stocks’ market values are similar to OSIS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FRHC 6 26711 3
PQG 13 36502 7
ALXO 9 361214 9
TWO 17 36539 1
AX 15 48303 -2
MD 22 338189 -1
SITC 14 41182 -1
Average 13.7 126949 2.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $71 million in OSIS’s case. Mednax Inc. (NYSE:MD) is the most popular stock in this table. On the other hand Freedom Holding Corp. (NASDAQ:FRHC) is the least popular one with only 6 bullish hedge fund positions. OSI Systems, Inc. (NASDAQ:OSIS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OSIS is 63.8. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on OSIS as the stock returned 17.3% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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