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. What do these smart investors think about ONE Gas Inc (NYSE:OGS)?
ONE Gas Inc (NYSE:OGS) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds' portfolios at the end of the first quarter of 2020. At the end of this article we will also compare OGS to other stocks including LHC Group, Inc. (NASDAQ:LHCG), Zions Bancorporation, National Association (NASDAQ:ZION), and Oshkosh Corporation (NYSE:OSK) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
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. 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 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.
[caption id="attachment_845793" align="aligncenter" width="392"] Peter Rathjens of Arrowstreet Capital[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the 10 stocks that went up during the 2008 crash to identify the companies that are likely to deliver double digit returns in up and down markets. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a peek at the recent hedge fund action encompassing ONE Gas Inc (NYSE:OGS).
How have hedgies been trading ONE Gas Inc (NYSE:OGS)?
Heading into the second quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in OGS over the last 18 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Millennium Management, managed by Israel Englander, holds the largest position in ONE Gas Inc (NYSE:OGS). Millennium Management has a $17.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Impax Asset Management, led by Ian Simm, holding a $8.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish comprise David Harding's Winton Capital Management, Mario Gabelli's GAMCO Investors and Noam Gottesman's GLG Partners. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to ONE Gas Inc (NYSE:OGS), around 0.2% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, dishing out 0.11 percent of its 13F equity portfolio to OGS.
Seeing as ONE Gas Inc (NYSE:OGS) has experienced bearish sentiment from the smart money, logic holds that there lies a certain "tier" of money managers who sold off their full holdings in the first quarter. It's worth mentioning that Clint Carlson's Carlson Capital cut the largest stake of the 750 funds tracked by Insider Monkey, worth about $22.9 million in stock, and Mika Toikka's AlphaCrest Capital Management was right behind this move, as the fund dumped about $0.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as ONE Gas Inc (NYSE:OGS) but similarly valued. These stocks are LHC Group, Inc. (NASDAQ:LHCG), Zions Bancorporation, National Association (NASDAQ:ZION), Oshkosh Corporation (NYSE:OSK), and Dunkin Brands Group Inc (NASDAQ:DNKN). This group of stocks' market caps are similar to OGS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LHCG,27,152070,1 ZION,33,112685,-10 OSK,22,214910,-6 DNKN,34,207067,3 Average,29,171683,-3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $56 million in OGS's case. Dunkin Brands Group Inc (NASDAQ:DNKN) is the most popular stock in this table. On the other hand Oshkosh Corporation (NYSE:OSK) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks ONE Gas Inc (NYSE:OGS) is even less popular than OSK. Hedge funds dodged a bullet by taking a bearish stance towards OGS. 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 13.3% in 2020 through June 25th but managed to beat the market by 16.8 percentage points. Unfortunately OGS wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); OGS investors were disappointed as the stock returned -10.8% during the second quarter (through June 25th) 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.