In this article we will take a look at whether hedge funds think On Holding AG (NYSE:ONON) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is On Holding AG (NYSE:ONON) undervalued? The smart money was buying. The number of long hedge fund bets improved by 30 in recent months. On Holding AG (NYSE:ONON) was in 30 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that ONON isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to view the fresh hedge fund action regarding On Holding AG (NYSE:ONON).
Lei Zhang of Hillhouse Capital Management
Do Hedge Funds Think ONON Is A Good Stock To Buy Now?
At third quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30 from the second quarter of 2021. By comparison, 0 hedge funds held shares or bullish call options in ONON a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Hillhouse Capital Management was the largest shareholder of On Holding AG (NYSE:ONON), with a stake worth $481.3 million reported as of the end of September. Trailing Hillhouse Capital Management was Luxor Capital Group, which amassed a stake valued at $183.9 million. Light Street Capital, Citadel Investment Group, and Samlyn Capital 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 Hillhouse Capital Management allocated the biggest weight to On Holding AG (NYSE:ONON), around 6.29% of its 13F portfolio. Luxor Capital Group is also relatively very bullish on the stock, dishing out 1.65 percent of its 13F equity portfolio to ONON.
Consequently, key money managers were breaking ground themselves. Hillhouse Capital Management, managed by Lei Zhang, created the biggest position in On Holding AG (NYSE:ONON). Hillhouse Capital Management had $481.3 million invested in the company at the end of the quarter. Christian Leone’s Luxor Capital Group also initiated a $183.9 million position during the quarter. The other funds with new positions in the stock are Glen Kacher’s Light Street Capital, Ken Griffin’s Citadel Investment Group, and Robert Pohly’s Samlyn Capital.
Let’s go over hedge fund activity in other stocks similar to On Holding AG (NYSE:ONON). We will take a look at RPM International Inc. (NYSE:RPM), Molson Coors Beverage Company (NYSE:TAP), Grifols SA (NASDAQ:GRFS), Zions Bancorporation, National Association (NASDAQ:ZION), Everest Re Group Ltd (NYSE:RE), NRG Energy Inc (NYSE:NRG), and Bausch Health Companies Inc. (NYSE:BHC). This group of stocks’ market values are closest to ONON’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RPM | 20 | 80551 | -2 |
| TAP | 29 | 236765 | -10 |
| GRFS | 12 | 199798 | -2 |
| ZION | 28 | 181500 | 4 |
| RE | 26 | 498125 | -4 |
| NRG | 34 | 1991642 | 1 |
| BHC | 39 | 3840623 | -6 |
| Average | 26.9 | 1004143 | -2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.9 hedge funds with bullish positions and the average amount invested in these stocks was $1004 million. That figure was $833 million in ONON’s case. Bausch Health Companies Inc. (NYSE:BHC) is the most popular stock in this table. On the other hand Grifols SA (NASDAQ:GRFS) is the least popular one with only 12 bullish hedge fund positions. On Holding AG (NYSE:ONON) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ONON is 63.3. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on ONON as the stock returned 33.3% since the end of Q3 (through 11/30) 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.
