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In this article we will take a look at whether hedge funds think Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) ready to rally soon? The best stock pickers are taking an optimistic view. The number of bullish hedge fund positions increased by 1 recently. Our calculations also showed that ORMP 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.
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 51 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.
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Paul Marshall of Marshall Wace[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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. Now let's take a look at the latest hedge fund action regarding Oramed Pharmaceuticals Inc. (NASDAQ:ORMP).
How have hedgies been trading Oramed Pharmaceuticals Inc. (NASDAQ:ORMP)?
Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ORMP over the last 18 quarters. So, let's examine 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, Renaissance Technologies has the biggest position in Oramed Pharmaceuticals Inc. (NASDAQ:ORMP), worth close to $0.6 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Marshall Wace LLP, led by Paul Marshall and Ian Wace, holding a $0.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism contain Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and John Zaro's Bourgeon Capital. In terms of the portfolio weights assigned to each position Bourgeon Capital allocated the biggest weight to Oramed Pharmaceuticals Inc. (NASDAQ:ORMP), around 0.01% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, earmarking 0.0023 percent of its 13F equity portfolio to ORMP.
Now, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, initiated the biggest position in Oramed Pharmaceuticals Inc. (NASDAQ:ORMP). Millennium Management had $0 million invested in the company at the end of the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) but similarly valued. We will take a look at Borr Drilling Limited (NYSE:BORR), Grindrod Shipping Holdings Ltd. (NASDAQ:GRIN), Pareteum Corporation (NASDAQ:TEUM), and Riverview Financial Corporation (NASDAQ:RIVE). This group of stocks' market caps are closest to ORMP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BORR,3,2880,-1 GRIN,2,3362,0 TEUM,3,286,2 RIVE,5,6121,-2 Average,3.25,3162,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $1 million in ORMP's case. Riverview Financial Corporation (NASDAQ:RIVE) is the most popular stock in this table. On the other hand Grindrod Shipping Holdings Ltd. (NASDAQ:GRIN) is the least popular one with only 2 bullish hedge fund positions. Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 but beat the market by 13.2 percentage points. Unfortunately ORMP wasn't nearly as popular as these 10 stocks and hedge funds that were betting on ORMP were disappointed as the stock returned 3.3% during the same time period 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.