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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Oramed Pharmaceuticals Inc. (NASDAQ:ORMP).
Is Oramed Pharmaceuticals (ORMP) a good stock to buy now? ORMP has experienced an increase in hedge fund sentiment of late. Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) was in 7 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ORMP isn't among the 30 most popular stocks among hedge funds (click for Q3 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 66 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.
Paul Marshall of Marshall Wace
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now let's check out the fresh hedge fund action regarding Oramed Pharmaceuticals Inc. (NASDAQ:ORMP).
How have hedgies been trading Oramed Pharmaceuticals Inc. (NASDAQ:ORMP)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 75% from the second quarter of 2020. On the other hand, there were a total of 5 hedge funds with a bullish position in ORMP a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Oramed Pharmaceuticals Inc. (NASDAQ:ORMP), with a stake worth $1.2 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $0.2 million. Marshall Wace LLP, LMR Partners, and Citadel Investment Group 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 Bourgeon Capital allocated the biggest weight to Oramed Pharmaceuticals Inc. (NASDAQ:ORMP), around 0.0045% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.0024 percent of its 13F equity portfolio to ORMP.
As one would reasonably expect, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, assembled the most valuable position in Oramed Pharmaceuticals Inc. (NASDAQ:ORMP). Millennium Management had $0.2 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new ORMP position is David Harding's Winton Capital Management.
Let's now review 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 Garrison Capital Inc (NASDAQ:GARS), Guaranty Federal Bancshares, Inc. (NASDAQ:GFED), Forum Energy Technologies Inc (NYSE:FET), Tuanche Limited (NASDAQ:TC), Great Elm Capital Group, Inc. (NASDAQ:GEC), Hennessy Advisors, Inc. (NASDAQ:HNNA), and TDH Holdings, Inc. (NASDAQ:PETZ). All of these stocks' market caps match ORMP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GARS,5,5684,0 GFED,2,1126,0 FET,6,1686,-8 TC,1,11,0 GEC,8,19722,0 HNNA,2,1081,0 PETZ,1,130,0 Average,3.6,4206,-1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.6 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $2 million in ORMP's case. Great Elm Capital Group, Inc. (NASDAQ:GEC) is the most popular stock in this table. On the other hand Tuanche Limited (NASDAQ:TC) is the least popular one with only 1 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. Our overall hedge fund sentiment score for ORMP is 80.9. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. Hedge funds were also right about betting on ORMP as the stock returned 49.4% since the end of Q3 (through 12/2) 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.