Do Hedge Funds Love Oracle Corporation (ORCL)?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Oracle Corporation (NYSE:ORCL).

Is Oracle Corporation (NYSE:ORCL) an exceptional investment right now? The best stock pickers were betting on the stock. The number of long hedge fund bets rose by 1 in recent months. Oracle Corporation (NYSE:ORCL) was in 56 hedge funds’ portfolios at the end of the third quarter of 2021. 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).

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 review the new hedge fund action encompassing Oracle Corporation (NYSE:ORCL).

Richard S. Pzena of Pzena Investment Management

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

At the end of the third quarter, a total of 56 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the previous quarter. On the other hand, there were a total of 56 hedge funds with a bullish position in ORCL a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management has the biggest position in Oracle Corporation (NYSE:ORCL), worth close to $1.3347 billion, comprising 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $463.1 million call position; 0.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Richard S. Pzena’s Pzena Investment Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to Oracle Corporation (NYSE:ORCL), around 5.91% of its 13F portfolio. Antipodes Partners is also relatively very bullish on the stock, earmarking 4.01 percent of its 13F equity portfolio to ORCL.

As industrywide interest jumped, specific money managers have jumped into Oracle Corporation (NYSE:ORCL) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the most outsized position in Oracle Corporation (NYSE: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 made a $32 million investment in the stock during the quarter. The other funds with new positions in the stock 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 now take a look at hedge fund activity in other stocks similar to Oracle Corporation (NYSE:ORCL). 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 caps resemble ORCL’s market cap.

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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 (NYSE: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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 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 4.5% since the end of September (through 11/30) 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 most of these stocks already outperformed the market in 2021.

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