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 873 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 June 30th. In this article we look at what those investors think of Owens Corning (NYSE:OC).
Is Owens Corning (NYSE:OC) a first-rate stock to buy now? Prominent investors were in a bullish mood. The number of long hedge fund bets moved up by 4 recently. Owens Corning (NYSE:OC) was in 34 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 47. Our calculations also showed that OC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech 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. Keeping this in mind let’s go over the new hedge fund action surrounding Owens Corning (NYSE:OC).
Do Hedge Funds Think OC Is A Good Stock To Buy Now?
At the end of June, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards OC over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Owens Corning (NYSE:OC) was held by Citadel Investment Group, which reported holding $105 million worth of stock at the end of June. It was followed by AQR Capital Management with a $84.2 million position. Other investors bullish on the company included GLG Partners, Arrowstreet Capital, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Levin Easterly Partners allocated the biggest weight to Owens Corning (NYSE:OC), around 2.64% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, dishing out 1.88 percent of its 13F equity portfolio to OC.
Consequently, specific money managers were breaking ground themselves. Renaissance Technologies, assembled the largest position in Owens Corning (NYSE:OC). Renaissance Technologies had $26.1 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $3.8 million position during the quarter. The other funds with brand new OC positions are Gregg Moskowitz’s Interval Partners, Paul Tudor Jones’s Tudor Investment Corp, and Donald Sussman’s Paloma Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Owens Corning (NYSE:OC) but similarly valued. These stocks are East West Bancorp, Inc. (NASDAQ:EWBC), Targa Resources Corp (NYSE:TRGP), Asana Inc. (NYSE:ASAN), Hubbell Incorporated (NYSE:HUBB), Erie Indemnity Company (NASDAQ:ERIE), Everest Re Group Ltd (NYSE:RE), and Gerdau SA (NYSE:GGB). This group of stocks’ market valuations match OC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EWBC | 24 | 480255 | -1 |
| TRGP | 26 | 387970 | 2 |
| ASAN | 22 | 592249 | 0 |
| HUBB | 15 | 459124 | 0 |
| ERIE | 15 | 48433 | 3 |
| RE | 30 | 686253 | -2 |
| GGB | 17 | 318478 | 6 |
| Average | 21.3 | 424680 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $425 million. That figure was $425 million in OC’s case. Everest Re Group Ltd (NYSE:RE) is the most popular stock in this table. On the other hand Hubbell Incorporated (NYSE:HUBB) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Owens Corning (NYSE:OC) is more popular among hedge funds. Our overall hedge fund sentiment score for OC is 80.7. 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. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Unfortunately OC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OC were disappointed as the stock returned -9.6% since the end of the second quarter (through 10/11) 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 since 2019.
Follow Owens Corning (NYSE:OC)
Follow Owens Corning (NYSE:OC)
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Disclosure: None. This article was originally published at Insider Monkey.
