Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Otis Worldwide Corporation (NYSE:OTIS) based on that data and determine whether they were really smart about the stock.
Otis Worldwide Corporation (NYSE:OTIS) has experienced an increase in support from the world’s most elite money managers in recent months. Otis Worldwide Corporation (NYSE:OTIS) was in 46 hedge funds’ portfolios at the end of September. The all time high for this statistic is 59. Our calculations also showed that OTIS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Keeping this in mind let’s take a glance at the key hedge fund action encompassing Otis Worldwide Corporation (NYSE:OTIS).
Aaron Cowen of Suvretta Capital Management
Do Hedge Funds Think OTIS Is A Good Stock To Buy Now?
At the end of September, a total of 46 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OTIS over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Ako Capital was the largest shareholder of Otis Worldwide Corporation (NYSE:OTIS), with a stake worth $394.6 million reported as of the end of September. Trailing Ako Capital was Deccan Value Advisors, which amassed a stake valued at $375.9 million. Suvretta Capital Management, Gates Capital Management, and Renaissance Technologies 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 Deccan Value Advisors allocated the biggest weight to Otis Worldwide Corporation (NYSE:OTIS), around 14.87% of its 13F portfolio. Gates Capital Management is also relatively very bullish on the stock, dishing out 5.53 percent of its 13F equity portfolio to OTIS.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Alyeska Investment Group, managed by Anand Parekh, created the most valuable position in Otis Worldwide Corporation (NYSE:OTIS). Alyeska Investment Group had $37.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $35.4 million investment in the stock during the quarter. The following funds were also among the new OTIS investors: Israel Englander’s Millennium Management, Donald Sussman’s Paloma Partners, and Jinghua Yan’s TwinBeech Capital.
Let’s now review hedge fund activity in other stocks similar to Otis Worldwide Corporation (NYSE:OTIS). These stocks are AFLAC Incorporated (NYSE:AFL), The Hershey Company (NYSE:HSY), NatWest Group plc (NYSE:NWG), Welltower Inc. (NYSE:WELL), TransDigm Group Incorporated (NYSE:TDG), Rockwell Automation Inc. (NYSE:ROK), and First Republic Bank (NYSE:FRC). This group of stocks’ market caps match OTIS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AFL | 34 | 223946 | 1 |
| HSY | 33 | 1274071 | -5 |
| NWG | 7 | 8068 | 2 |
| WELL | 22 | 508861 | 3 |
| TDG | 63 | 7188554 | 6 |
| ROK | 29 | 519693 | 4 |
| FRC | 35 | 918312 | 1 |
| Average | 31.9 | 1520215 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.9 hedge funds with bullish positions and the average amount invested in these stocks was $1520 million. That figure was $2207 million in OTIS’s case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand NatWest Group plc (NYSE:NWG) is the least popular one with only 7 bullish hedge fund positions. Otis Worldwide Corporation (NYSE:OTIS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OTIS is 64.2. 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 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 still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on OTIS as the stock returned 4.1% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
Follow Otis Worldwide Corp (NYSE:OTIS)
Follow Otis Worldwide Corp (NYSE:OTIS)
Suggested Articles:
- 30 Most Expensive Cities in the US
- 30 Most Visited Cities In the US
- 15 Largest Gaming Companies In The World
Disclosure: None. This article was originally published at Insider Monkey.
