Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 15 S&P 500 stocks among hedge funds at the end of December 2018 yielded an average return of 19.7% year-to-date, vs. a gain of 13.1% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Old National Bancorp (NASDAQ:ONB).
Old National Bancorp (NASDAQ:ONB) was in 7 hedge funds' portfolios at the end of December. ONB investors should be aware of an increase in support from the world's most elite money managers recently. There were 6 hedge funds in our database with ONB positions at the end of the previous quarter. Our calculations also showed that onb isn't among the 30 most popular stocks among hedge funds.
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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's analyze the latest hedge fund action regarding Old National Bancorp (NASDAQ:ONB).
Hedge fund activity in Old National Bancorp (NASDAQ:ONB)
At the end of the fourth quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the second quarter of 2018. On the other hand, there were a total of 10 hedge funds with a bullish position in ONB a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Old National Bancorp (NASDAQ:ONB) was held by Balyasny Asset Management, which reported holding $10.5 million worth of stock at the end of September. It was followed by Basswood Capital with a $8.5 million position. Other investors bullish on the company included Renaissance Technologies, Private Capital Management, and Citadel Investment Group.
As one would reasonably expect, some big names have jumped into Old National Bancorp (NASDAQ:ONB) headfirst. Renaissance Technologies, managed by Jim Simons, created the biggest position in Old National Bancorp (NASDAQ:ONB). Renaissance Technologies had $4 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $2.4 million position during the quarter. The only other fund with a brand new ONB position is Matthew Hulsizer's PEAK6 Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Old National Bancorp (NASDAQ:ONB) but similarly valued. These stocks are Corelogic Inc (NYSE:CLGX), Akcea Therapeutics, Inc. (NASDAQ:AKCA), John Wiley & Sons Inc (NYSE:JW), and Agios Pharmaceuticals Inc (NASDAQ:AGIO). This group of stocks' market caps are similar to ONB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLGX,19,264131,-1 AKCA,6,30018,0 JW,17,105456,2 AGIO,17,205975,-5 Average,14.75,151395,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $151 million. That figure was $29 million in ONB's case. Corelogic Inc (NYSE:CLGX) is the most popular stock in this table. On the other hand Akcea Therapeutics, Inc. (NASDAQ:AKCA) is the least popular one with only 6 bullish hedge fund positions. Old National Bancorp (NASDAQ:ONB) is not the least popular stock in this group but hedge fund interest is still below average. 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately ONB wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); ONB investors were disappointed as the stock returned 8.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.