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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Orange SA (NYSE:ORAN).
Is Orange SA (NYSE:ORAN) a good investment today? Hedge funds are getting more bullish. The number of bullish hedge fund positions advanced by 3 in recent months. Our calculations also showed that ORAN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). ORAN was in 5 hedge funds' portfolios at the end of the first quarter of 2020. There were 2 hedge funds in our database with ORAN positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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Steven Tananbaum of GoldenTree Asset Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to take a peek at the new hedge fund action encompassing Orange SA (NYSE:ORAN).
How are hedge funds trading Orange SA (NYSE:ORAN)?
At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 150% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ORAN over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GoldenTree Asset Management, managed by Steven Tananbaum, holds the largest position in Orange SA (NYSE:ORAN). GoldenTree Asset Management has a $5 million position in the stock, comprising 0.9% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $3.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions contain Israel Englander's Millennium Management, Paul Marshall and Ian Wace's Marshall Wace LLP and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position GoldenTree Asset Management allocated the biggest weight to Orange SA (NYSE:ORAN), around 0.92% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to ORAN.
Consequently, key hedge funds were leading the bulls' herd. GoldenTree Asset Management, managed by Steven Tananbaum, assembled the most outsized position in Orange SA (NYSE:ORAN). GoldenTree Asset Management had $5 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $3 million position during the quarter. The only other fund with a new position in the stock is Paul Marshall and Ian Wace's Marshall Wace LLP.
Let's go over hedge fund activity in other stocks similar to Orange SA (NYSE:ORAN). We will take a look at General Mills, Inc. (NYSE:GIS), Eaton Corporation plc (NYSE:ETN), FedEx Corporation (NYSE:FDX), and Xcel Energy Inc (NASDAQ:XEL). This group of stocks' market valuations are similar to ORAN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GIS,39,690598,2 ETN,35,823530,-7 FDX,50,1092300,5 XEL,24,394426,9 Average,37,750214,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $750 million. That figure was $13 million in ORAN's case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand Xcel Energy Inc (NASDAQ:XEL) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks Orange SA (NYSE:ORAN) is even less popular than XEL. Hedge funds dodged a bullet by taking a bearish stance towards ORAN. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately ORAN wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ORAN investors were disappointed as the stock returned -0.5% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.