Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards O-I Glass, Inc. (NYSE:OI) at the end of the third quarter and determine whether the smart money was really smart about this stock.
O-I Glass, Inc. (NYSE:OI) investors should pay attention to an increase in enthusiasm from smart money of late. O-I Glass, Inc. (NYSE:OI) was in 32 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 24 hedge funds in our database with OI holdings at the end of June. Our calculations also showed that OI 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. With all of this in mind we’re going to view the new hedge fund action regarding O-I Glass, Inc. (NYSE:OI).
Alexander Roepers of Atlantic Investment Management
Do Hedge Funds Think OI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OI over the last 25 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Abrams Capital Management held the most valuable stake in O-I Glass, Inc. (NYSE:OI), which was worth $99 million at the end of the third quarter. On the second spot was Lyrical Asset Management which amassed $79.6 million worth of shares. Arrowstreet Capital, Millennium Management, and Atlantic Investment Management 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 Atlantic Investment Management allocated the biggest weight to O-I Glass, Inc. (NYSE:OI), around 3.14% of its 13F portfolio. Abrams Capital Management is also relatively very bullish on the stock, dishing out 2.16 percent of its 13F equity portfolio to OI.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), created the most outsized call position in O-I Glass, Inc. (NYSE:OI). Schonfeld Strategic Advisors had $7.1 million invested in the company at the end of the quarter. Andrew Kurita’s Kettle Hill Capital Management also initiated a $6.9 million position during the quarter. The other funds with brand new OI positions are Ken Griffin’s Citadel Investment Group, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Lee Ainslie’s Maverick Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as O-I Glass, Inc. (NYSE:OI) but similarly valued. We will take a look at Glaukos Corporation (NYSE:GKOS), First Financial Bancorp (NASDAQ:FFBC), Hillman Solutions Corp. (NASDAQ:HLMN), Telephone & Data Systems, Inc. (NYSE:TDS), Astra Space Inc. (NASDAQ:ASTR), D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi (NASDAQ:HEPS), and Criteo SA (NASDAQ:CRTO). All of these stocks’ market caps are similar to OI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GKOS | 23 | 176344 | 4 |
| FFBC | 7 | 10840 | 0 |
| HLMN | 25 | 481224 | 25 |
| TDS | 19 | 120636 | 1 |
| ASTR | 13 | 85412 | 1 |
| HEPS | 7 | 14494 | 7 |
| CRTO | 13 | 167551 | -3 |
| Average | 15.3 | 150929 | 5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $151 million. That figure was $259 million in OI’s case. Hillman Solutions Corp. (NASDAQ:HLMN) is the most popular stock in this table. On the other hand First Financial Bancorp (NASDAQ:FFBC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks O-I Glass, Inc. (NYSE:OI) is more popular among hedge funds. Our overall hedge fund sentiment score for OI is 90. 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 beat the market by 3.6 percentage points. Unfortunately, OI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OI were disappointed as the stock returned -6.7% since the end of the third quarter (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 O-I Glass Inc. (NYSE:OI)
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Disclosure: None. This article was originally published at Insider Monkey.
