Were Hedge Funds Right About Piling Into Oshkosh Corporation (OSK)?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Oshkosh Corporation (NYSE:OSK), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Oshkosh Corporation (NYSE:OSK) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. Oshkosh Corporation (NYSE:OSK) was in 40 hedge funds’ portfolios at the end of December. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 29 hedge funds in our database with OSK holdings at the end of September. Our calculations also showed that OSK isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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 check out the new hedge fund action regarding Oshkosh Corporation (NYSE:OSK).

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

At Q4’s end, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OSK over the last 22 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Among these funds, Citadel Investment Group held the most valuable stake in Oshkosh Corporation (NYSE:OSK), which was worth $120.6 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $59.1 million worth of shares. AQR Capital Management, Balyasny Asset Management, and Lodge Hill 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 Lodge Hill Capital allocated the biggest weight to Oshkosh Corporation (NYSE:OSK), around 7.09% of its 13F portfolio. Cartenna Capital is also relatively very bullish on the stock, dishing out 3.3 percent of its 13F equity portfolio to OSK.

As aggregate interest increased, specific money managers were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, initiated the biggest position in Oshkosh Corporation (NYSE:OSK). Point72 Asset Management had $8.7 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also made a $6.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Sander Gerber’s Hudson Bay Capital Management, Louis Bacon’s Moore Global Investments, and Peter Avellone’s Cartenna Capital.

Let’s now review hedge fund activity in other stocks similar to Oshkosh Corporation (NYSE:OSK). These stocks are Polaris Inc. (NYSE:PII), Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS), Leggett & Platt, Inc. (NYSE:LEG), Turning Point Therapeutics, Inc. (NASDAQ:TPTX), Parsley Energy Inc (NYSE:PE), Nikola Corporation (NASDAQ:NKLA), and Herbalife Nutrition Ltd. (NYSE:HLF). This group of stocks’ market caps resemble OSK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PII 31 486896 -8
SBS 12 259191 1
LEG 20 128570 -6
TPTX 27 877188 3
PE 32 466476 -5
NKLA 18 240523 1
HLF 41 2726220 5
Average 25.9 740723 -1.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $741 million. That figure was $406 million in OSK’s case. Herbalife Nutrition Ltd. (NYSE:HLF) is the most popular stock in this table. On the other hand Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS) is the least popular one with only 12 bullish hedge fund positions. Oshkosh Corporation (NYSE:OSK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OSK is 88.3. 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 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on OSK as the stock returned 45.1% since the end of Q4 (through 4/30) 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.