Ocugen, Inc. (OCGN): Are Hedge Funds Right About This Stock?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Ocugen, Inc. (NASDAQ:OCGN).

Ocugen, Inc. (NASDAQ:OCGN) shareholders have witnessed an increase in enthusiasm from smart money in recent months. Ocugen, Inc. (NASDAQ:OCGN) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 9. There were 3 hedge funds in our database with OCGN holdings at the end of December. Our calculations also showed that OCGN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the eyes of most traders, hedge funds are viewed as worthless, old investment vehicles of yesteryear. While there are more than 8000 funds in operation at present, We look at the moguls of this group, about 850 funds. It is estimated that this group of investors watch over bulk of all hedge funds’ total asset base, and by following their inimitable picks, Insider Monkey has formulated a few investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. With all of this in mind we’re going to take a look at the new hedge fund action surrounding Ocugen, Inc. (NASDAQ:OCGN).

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

At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in OCGN a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Ocugen, Inc. (NASDAQ:OCGN). Citadel Investment Group has a $5.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $2.3 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Israel Englander’s Millennium Management, Anthony Bozza’s Lakewood Capital Management and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners. In terms of the portfolio weights assigned to each position Lakewood Capital Management allocated the biggest weight to Ocugen, Inc. (NASDAQ:OCGN), around 0.05% of its 13F portfolio. LMR Partners is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to OCGN.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, assembled the biggest call position in Ocugen, Inc. (NASDAQ:OCGN). Citadel Investment Group had $2.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $2.1 million position during the quarter. The other funds with new positions in the stock are Anthony Bozza’s Lakewood Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Joel Greenblatt’s Gotham Asset Management.

Let’s now review hedge fund activity in other stocks similar to Ocugen, Inc. (NASDAQ:OCGN). We will take a look at AZZ Incorporated (NYSE:AZZ), EVO Payments, Inc. (NASDAQ:EVOP), 908 Devices Inc. (NASDAQ:MASS), Zealand Pharma A/S (NASDAQ:ZEAL), Cango Inc. (NYSE:CANG), Columbus McKinnon Corporation (NASDAQ:CMCO), and Montrose Environmental Group, Inc. (NYSE:MEG). This group of stocks’ market caps are similar to OCGN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.3 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $10 million in OCGN’s case. 908 Devices Inc. (NASDAQ:MASS) is the most popular stock in this table. On the other hand Zealand Pharma A/S (NASDAQ:ZEAL) is the least popular one with only 1 bullish hedge fund positions. Ocugen, Inc. (NASDAQ:OCGN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OCGN is 47.2. 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 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on OCGN as the stock returned 23% since the end of the first quarter (through 6/25) and outperformed the market by an even larger margin.

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