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In this article we will analyze whether Ocugen, Inc. (NASDAQ:OCGN) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Ocugen, Inc. (NASDAQ:OCGN) has experienced an increase in hedge fund interest of late. Ocugen, Inc. (NASDAQ:OCGN) was in 10 hedge funds' portfolios at the end of June. The all time high for this statistic is 9. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 6 hedge funds in our database with OCGN positions at the end of the first quarter. Our calculations also showed that OCGN isn't among the 30 most popular stocks among hedge funds (click for Q2 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Ian Wace of Marshall Wace
At Insider Monkey, we scour multiple sources to uncover 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 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. 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 go over the key 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 second quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the first quarter of 2020. On the other hand, there were a total of 3 hedge funds with a bullish position in OCGN a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Ocugen, Inc. (NASDAQ:OCGN), with a stake worth $19.6 million reported as of the end of June. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $15.9 million. Valiant Capital, OZ Management, and Millennium Management 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 Valiant Capital allocated the biggest weight to Ocugen, Inc. (NASDAQ:OCGN), around 0.95% of its 13F portfolio. OZ Management is also relatively very bullish on the stock, setting aside 0.05 percent of its 13F equity portfolio to OCGN.
As aggregate interest increased, some big names have been driving this bullishness. Renaissance Technologies, established the most outsized position in Ocugen, Inc. (NASDAQ:OCGN). Renaissance Technologies had $19.6 million invested in the company at the end of the quarter. Christopher R. Hansen's Valiant Capital also initiated a $12.7 million position during the quarter. The following funds were also among the new OCGN investors: Daniel S. Och's OZ Management, Paul Marshall and Ian Wace's Marshall Wace LLP, and Daniel S. Och's OZ Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Ocugen, Inc. (NASDAQ:OCGN) but similarly valued. These stocks are G-III Apparel Group, Ltd. (NASDAQ:GIII), Tenneco Inc (NYSE:TEN), Sturm, Ruger & Company, Inc. (NYSE:RGR), Danaos Corporation (NYSE:DAC), Primoris Services Corp (NASDAQ:PRIM), Heron Therapeutics Inc (NASDAQ:HRTX), and Cortexyme, Inc. (NASDAQ:CRTX). All of these stocks' market caps match OCGN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GIII,17,99902,3 TEN,26,219322,-2 RGR,19,168735,-2 DAC,18,163301,6 PRIM,16,94263,-12 HRTX,16,373385,2 CRTX,9,5332,6 Average,17.3,160606,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $161 million. That figure was $49 million in OCGN's case. Tenneco Inc (NYSE:TEN) is the most popular stock in this table. On the other hand Cortexyme, Inc. (NASDAQ:CRTX) is the least popular one with only 9 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 41.9. 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 negative signal and 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately OCGN wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); OCGN investors were disappointed as the stock returned -4.5% since the end of June (through 9/27) 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 most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.