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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Old Republic International Corporation (NYSE:ORI).
Is ORI a good stock to buy? Old Republic International Corporation (NYSE:ORI) investors should be aware of an increase in activity from the world's largest hedge funds lately. Old Republic International Corporation (NYSE:ORI) was in 31 hedge funds' portfolios at the end of September. The all time high for this statistic is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 26 hedge funds in our database with ORI positions at the end of the second quarter. Our calculations also showed that ORI 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. With all of this in mind we're going to view the key hedge fund action surrounding Old Republic International Corporation (NYSE:ORI).
Do Hedge Funds Think ORI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in ORI 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 Republic International Corporation (NYSE:ORI) was held by Renaissance Technologies, which reported holding $39.2 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $33.8 million position. Other investors bullish on the company included Two Sigma Advisors, Millennium Management, and AQR Capital Management. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to Old Republic International Corporation (NYSE:ORI), around 2.63% of its 13F portfolio. Kettle Hill Capital Management is also relatively very bullish on the stock, dishing out 1.37 percent of its 13F equity portfolio to ORI.
Now, key money managers have jumped into Old Republic International Corporation (NYSE:ORI) headfirst. Owl Creek Asset Management, managed by Jeffrey Altman, created the most valuable position in Old Republic International Corporation (NYSE:ORI). Owl Creek Asset Management had $13.3 million invested in the company at the end of the quarter. Andrew Kurita's Kettle Hill Capital Management also initiated a $5.8 million position during the quarter. The other funds with new positions in the stock are Chuck Royce's Royce & Associates, Paul Tudor Jones's Tudor Investment Corp, and Renee Yao's Neo Ivy Capital.
Let's now take a look at hedge fund activity in other stocks similar to Old Republic International Corporation (NYSE:ORI). These stocks are Nutanix, Inc. (NASDAQ:NTNX), Under Armour Inc (NYSE:UA), Primerica, Inc. (NYSE:PRI), ICL Group Ltd. (NYSE:ICL), Asana Inc. (NYSE:ASAN), Signature Bank (NASDAQ:SBNY), and Virtu Financial Inc (NASDAQ:VIRT). This group of stocks' market valuations resemble ORI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NTNX,24,535548,4 UA,48,846715,8 PRI,35,436663,10 ICL,5,18886,0 ASAN,17,219416,17 SBNY,35,344263,11 VIRT,26,264490,-2 Average,27.1,380854,6.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $381 million. That figure was $263 million in ORI's case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand ICL Group Ltd. (NYSE:ICL) is the least popular one with only 5 bullish hedge fund positions. Old Republic International Corporation (NYSE:ORI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ORI is 70.2. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on ORI as the stock returned 29.8% since the end of Q3 (through 12/18) 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.