We at Insider Monkey have gone over 821 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, near the height of the coronavirus market crash. In this article, we look at what those funds think of O-I Glass, Inc. (NYSE:OI) based on that data.
Is O-I Glass, Inc. (NYSE:OI) the right pick for your portfolio? The smart money is in an optimistic mood. The number of long hedge fund positions advanced by 9 lately. Our calculations also showed that OI 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). Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_338491" align="aligncenter" width="400"] David Abrams of Abrams Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. With all of this in mind let's check out the fresh hedge fund action surrounding O-I Glass, Inc. (NYSE:OI).
What does smart money think about O-I Glass, Inc. (NYSE:OI)?
Heading into the second quarter of 2020, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 45% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in OI a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Abrams Capital Management was the largest shareholder of O-I Glass, Inc. (NYSE:OI), with a stake worth $49.3 million reported as of the end of September. Trailing Abrams Capital Management was Atlantic Investment Management, which amassed a stake valued at $46.2 million. First Pacific Advisors LLC, Lyrical Asset Management, and Contrarius Investment 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 Atlantic Investment Management allocated the biggest weight to O-I Glass, Inc. (NYSE:OI), around 26.05% of its 13F portfolio. Contrarius Investment Management is also relatively very bullish on the stock, designating 2.75 percent of its 13F equity portfolio to OI.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into O-I Glass, Inc. (NYSE:OI) headfirst. Lodge Hill Capital, managed by Clint Murray, created the biggest position in O-I Glass, Inc. (NYSE:OI). Lodge Hill Capital had $3.1 million invested in the company at the end of the quarter. Yi Xin's Ariose Capital also initiated a $2.1 million position during the quarter. The other funds with brand new OI positions are Benjamin A. Smith's Laurion Capital Management, Cliff Asness's AQR Capital Management, and Franklin Parlamis's Aequim Alternative Investments.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as O-I Glass, Inc. (NYSE:OI) but similarly valued. We will take a look at Axos Financial, Inc. (NYSE:AX), Heartland Financial USA Inc (NASDAQ:HTLF), James River Group Holdings Ltd (NASDAQ:JRVR), and Aurora Cannabis Inc. (NASDAQ:ACB). This group of stocks' market valuations are closest to OI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AX,12,43447,-3 HTLF,6,6048,-2 JRVR,13,72712,3 ACB,9,12761,-3 Average,10,33742,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $255 million in OI's case. James River Group Holdings Ltd (NASDAQ:JRVR) is the most popular stock in this table. On the other hand Heartland Financial USA Inc (NASDAQ:HTLF) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks O-I Glass, Inc. (NYSE:OI) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds 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 and still beat the market by 13.2 percentage points. Unfortunately OI wasn't nearly as popular as these 10 stocks and hedge funds that were betting on OI were disappointed as the stock returned 7.7% 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 in 2020.
Disclosure: None. This article was originally published at Insider Monkey.