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 867 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 September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Oracle Corporation (NASDAQ:ORCL) and determine whether the smart money was really smart about this stock.
Is Oracle Corporation (NASDAQ:ORCL) undervalued? Prominent investors were getting more bullish. The number of bullish hedge fund bets advanced by 1 lately. Oracle Corporation (NASDAQ:ORCL) was in 56 hedge funds’ portfolios at the end of September. The all time high for this statistic is 74. Our calculations also showed that ORCL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 55 hedge funds in our database with ORCL positions at the end of the second quarter.
Richard S. Pzena of Pzena Investment Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s view the fresh hedge fund action encompassing Oracle Corporation (NASDAQ:ORCL).
Do Hedge Funds Think ORCL Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 56 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from the second quarter of 2021. On the other hand, there were a total of 56 hedge funds with a bullish position in ORCL a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Oracle Corporation (NASDAQ:ORCL) was held by Fisher Asset Management, which reported holding $1334.7 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $463.1 million position. Other investors bullish on the company included Two Sigma Advisors, Pzena Investment Management, and Millennium Management. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to Oracle Corporation (NASDAQ:ORCL), around 5.91% of its 13F portfolio. Antipodes Partners is also relatively very bullish on the stock, setting aside 4.01 percent of its 13F equity portfolio to ORCL.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, created the most valuable position in Oracle Corporation (NASDAQ:ORCL). Balyasny Asset Management had $52.7 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $32 million position during the quarter. The other funds with brand new ORCL positions are Louis Bacon’s Moore Global Investments, Dmitry Balyasny’s Balyasny Asset Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Oracle Corporation (NASDAQ:ORCL) but similarly valued. We will take a look at NIKE, Inc. (NYSE:NKE), Cisco Systems, Inc. (NASDAQ:CSCO), The Coca-Cola Company (NYSE:KO), Thermo Fisher Scientific Inc. (NYSE:TMO), Verizon Communications Inc. (NYSE:VZ), Eli Lilly and Company (NYSE:LLY), and Novo Nordisk A/S (NYSE:NVO). This group of stocks’ market values match ORCL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NKE | 70 | 5682126 | 3 |
| CSCO | 63 | 3937668 | 3 |
| KO | 61 | 25137199 | -1 |
| TMO | 94 | 8210112 | 7 |
| VZ | 57 | 10359205 | -6 |
| LLY | 62 | 4287033 | -2 |
| NVO | 27 | 4053265 | 7 |
| Average | 62 | 8809515 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 62 hedge funds with bullish positions and the average amount invested in these stocks was $8810 million. That figure was $3473 million in ORCL’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Novo Nordisk A/S (NYSE:NVO) is the least popular one with only 27 bullish hedge fund positions. Oracle Corporation (NASDAQ:ORCL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ORCL is 50.3. 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. This is a slightly negative signal and 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 29.6% in 2021 and surpassed the market again by 3.6 percentage points. Unfortunately, ORCL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ORCL investors were disappointed as the stock returned -6.2% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Oracle Corp (NYSE:ORCL)
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Disclosure: None. This article was originally published at Insider Monkey.
