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Should I Avoid Oshkosh Corporation (OSK)?

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We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of Oshkosh Corporation (NYSE:OSK) based on that data.

Is Oshkosh Corporation (NYSE:OSK) an outstanding investment today? Money managers were getting less optimistic. The number of bullish hedge fund positions dropped by 14 lately. Oshkosh Corporation (NYSE:OSK) was in 26 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that OSK isn't among the 30 most popular stocks among hedge funds (click for Q1 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.

Ken Griffin CITADEL INVESTMENT GROUP
Ken Griffin CITADEL INVESTMENT GROUP

Ken Griffin of Citadel Investment Group

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. 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. Keeping this in mind we're going to take a look at the recent hedge fund action regarding Oshkosh Corporation (NYSE:OSK).

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

Heading into the second quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -35% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OSK over the last 23 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, AQR Capital Management was the largest shareholder of Oshkosh Corporation (NYSE:OSK), with a stake worth $92.7 million reported as of the end of March. Trailing AQR Capital Management was Citadel Investment Group, which amassed a stake valued at $89.9 million. Balyasny Asset Management, Millennium Management, and Alyeska 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 Albar Capital allocated the biggest weight to Oshkosh Corporation (NYSE:OSK), around 6.05% of its 13F portfolio. Lodge Hill Capital is also relatively very bullish on the stock, earmarking 5.14 percent of its 13F equity portfolio to OSK.

Due to the fact that Oshkosh Corporation (NYSE:OSK) has witnessed falling interest from the smart money, it's easy to see that there was a specific group of hedgies who were dropping their positions entirely heading into Q2. It's worth mentioning that Renaissance Technologies dropped the biggest stake of the 750 funds monitored by Insider Monkey, valued at close to $12.8 million in stock, and Clint Carlson's Carlson Capital was right behind this move, as the fund sold off about $6.1 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 14 funds heading into Q2.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Oshkosh Corporation (NYSE:OSK) but similarly valued. These stocks are Autoliv Inc. (NYSE:ALV), New Fortress Energy Inc. (NASDAQ:NFE), CAE, Inc. (NYSE:CAE), Pearson PLC (NYSE:PSO), Genpact Limited (NYSE:G), Casey's General Stores, Inc. (NASDAQ:CASY), and RenaissanceRe Holdings Ltd. (NYSE:RNR). This group of stocks' market values match OSK's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALV,20,813218,-6 NFE,12,30553,1 CAE,17,113000,7 PSO,6,19900,1 G,23,271528,-8 CASY,11,96510,-12 RNR,30,470953,-9 Average,17,259380,-3.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $259 million. That figure was $416 million in OSK's case. RenaissanceRe Holdings Ltd. (NYSE:RNR) is the most popular stock in this table. On the other hand Pearson PLC (NYSE:PSO) is the least popular one with only 6 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 52.2. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately OSK wasn't nearly as popular as these 5 stocks and hedge funds that were betting on OSK were disappointed as the stock returned 4.5% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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