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Is Oshkosh Corporation (OSK) Going to Burn These Hedge Funds?

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In this article we will take a look at whether hedge funds think Oshkosh Corporation (NYSE:OSK) 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 Oshkosh Corporation (NYSE:OSK) the right pick for your portfolio? Hedge funds were betting on the stock. The number of bullish hedge fund bets went up by 2 in recent months. Oshkosh Corporation (NYSE:OSK) was in 28 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that OSK isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At the moment there are plenty of metrics shareholders have at their disposal to size up their holdings. Some of the most under-the-radar metrics are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the broader indices by a superb amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Dmitry Balyasny of Balyasny Asset Managemnet
Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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. With all of this in mind we're going to take a peek at the fresh hedge fund action surrounding Oshkosh Corporation (NYSE:OSK).

Do Hedge Funds Think OSK Is A Good Stock To Buy Now?

At the end of June, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from one quarter earlier. On the other hand, there were a total of 27 hedge funds with a bullish position in OSK a year ago. With the smart money's capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is OSK A Good Stock To Buy?
Is OSK A Good Stock To Buy?

Among these funds, AQR Capital Management held the most valuable stake in Oshkosh Corporation (NYSE:OSK), which was worth $92.5 million at the end of the second quarter. On the second spot was Balyasny Asset Management which amassed $61 million worth of shares. Citadel Investment Group, Skylands Capital, and Alyeska 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 Lodge Hill Capital allocated the biggest weight to Oshkosh Corporation (NYSE:OSK), around 6.51% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, dishing out 2.99 percent of its 13F equity portfolio to OSK.

Consequently, key money managers were breaking ground themselves. Echo Street Capital Management, managed by Greg Poole, initiated the largest position in Oshkosh Corporation (NYSE:OSK). Echo Street Capital Management had $1 million invested in the company at the end of the quarter. Greg Eisner's Engineers Gate Manager also initiated a $0.7 million position during the quarter. The only other fund with a new position in the stock is Lee Ainslie's Maverick Capital.

Let's also examine hedge fund activity in other stocks similar to Oshkosh Corporation (NYSE:OSK). We will take a look at Autoliv Inc. (NYSE:ALV), Omega Healthcare Investors Inc (NYSE:OHI), US Foods Holding Corp. (NYSE:USFD), Genpact Limited (NYSE:G), TFI International Inc. (NYSE:TFII), Under Armour Inc (NYSE:UA), and Huntington Ingalls Industries Inc (NYSE:HII). This group of stocks' market values are closest to OSK's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALV,23,860834,3 OHI,20,142609,-5 USFD,35,1399474,-5 G,22,234361,-1 TFII,13,101129,-6 UA,51,1786550,0 HII,21,153435,1 Average,26.4,668342,-1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $668 million. That figure was $360 million in OSK's case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand TFI International Inc. (NYSE:TFII) is the least popular one with only 13 bullish hedge fund positions. Oshkosh Corporation (NYSE:OSK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OSK is 47.7. 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. 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 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 24.9% in 2021 through October 15th and beat the market again by 4.5 percentage points. Unfortunately OSK wasn't nearly as popular as these 5 stocks and hedge funds that were betting on OSK were disappointed as the stock returned -18.2% since the end of June (through 10/15) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.