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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. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of Olo Inc. (NYSE:OLO).
Is OLO a good stock to buy? The smart money was turning bullish. The number of bullish hedge fund bets went up by 21 recently. Olo Inc. (NYSE:OLO) was in 21 hedge funds' portfolios at the end of March. Our calculations also showed that OLO isn't among the 30 most popular stocks among hedge funds (click for Q1 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. 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 S&P 500 ETFs by 115 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 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.
Alex Sacerdote of Whale Rock Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. Now we're going to review the recent hedge fund action encompassing Olo Inc. (NYSE:OLO).
Do Hedge Funds Think OLO Is A Good Stock To Buy Now?
At Q1's end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21 from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OLO over the last 23 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.
The largest stake in Olo Inc. (NYSE:OLO) was held by Tiger Global Management LLC, which reported holding $18 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $9.5 million position. Other investors bullish on the company included Whale Rock Capital Management, Schonfeld Strategic Advisors, and Alyeska Investment Group. In terms of the portfolio weights assigned to each position ThornTree Capital Partners allocated the biggest weight to Olo Inc. (NYSE:OLO), around 0.45% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, designating 0.36 percent of its 13F equity portfolio to OLO.
Now, specific money managers have been driving this bullishness. Tiger Global Management LLC, managed by Chase Coleman, assembled the largest position in Olo Inc. (NYSE:OLO). Tiger Global Management LLC had $18 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $9.5 million investment in the stock during the quarter. The other funds with brand new OLO positions are Alex Sacerdote's Whale Rock Capital Management, Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, and Anand Parekh's Alyeska Investment Group.
Let's also examine hedge fund activity in other stocks similar to Olo Inc. (NYSE:OLO). We will take a look at Safehold Inc. (NYSE:SAFE), Physicians Realty Trust (NYSE:DOC), Companhia Energetica Minas Gerais (NYSE:CIG), Commercial Metals Company (NYSE:CMC), Hancock Whitney Corporation (NASDAQ:HWC), MultiPlan Corporation (NYSE:MPLN), and LGI Homes Inc (NASDAQ:LGIH). All of these stocks' market caps match OLO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SAFE,8,7714,-1 DOC,19,119409,4 CIG,13,65122,1 CMC,20,134704,-3 HWC,15,114698,0 MPLN,30,328984,5 LGIH,16,80296,-7 Average,17.3,121561,-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 $122 million. That figure was $86 million in OLO's case. MultiPlan Corporation (NYSE:MPLN) is the most popular stock in this table. On the other hand Safehold Inc. (NYSE:SAFE) is the least popular one with only 8 bullish hedge fund positions. Olo Inc. (NYSE:OLO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OLO is 57.3. 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. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on OLO as the stock returned 30.9% since the end of Q1 (through 7/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.