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. In this article we look at what those investors think of Overstock.com, Inc. (NASDAQ:OSTK).
Overstock.com, Inc. (NASDAQ:OSTK) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. Overstock.com, Inc. (NASDAQ:OSTK) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 31. There were 28 hedge funds in our database with OSTK holdings at the end of June. Our calculations also showed that OSTK 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 let’s view the key hedge fund action encompassing Overstock.com, Inc. (NASDAQ:OSTK).
Stanley Druckenmiller of Duquesne Capital
Do Hedge Funds Think OSTK Is A Good Stock To Buy Now?
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OSTK over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, D E Shaw held the most valuable stake in Overstock.com, Inc. (NASDAQ:OSTK), which was worth $48.3 million at the end of the third quarter. On the second spot was Half Sky Capital which amassed $46.2 million worth of shares. Balyasny Asset Management, Discovery Capital Management, and Intrinsic Edge Capital 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 Half Sky Capital allocated the biggest weight to Overstock.com, Inc. (NASDAQ:OSTK), around 17.11% of its 13F portfolio. Element Capital Management is also relatively very bullish on the stock, designating 2.1 percent of its 13F equity portfolio to OSTK.
Seeing as Overstock.com, Inc. (NASDAQ:OSTK) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of money managers that slashed their positions entirely last quarter. Interestingly, Stephen Mildenhall’s Contrarius Investment Management dumped the largest investment of the “upper crust” of funds watched by Insider Monkey, valued at about $19.7 million in stock. Ken Grossman and Glen Schneider’s fund, SG Capital Management, also dumped its stock, about $6 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Overstock.com, Inc. (NASDAQ:OSTK) but similarly valued. These stocks are PROG Holdings Inc (NYSE:PRG), Beacon Roofing Supply, Inc. (NASDAQ:BECN), CareDx, Inc. (NASDAQ:CDNA), Enel Chile S.A. (NYSE:ENIC), EnLink Midstream LLC (NYSE:ENLC), Bank of Hawaii Corporation (NYSE:BOH), and White Mountains Insurance Group Ltd (NYSE:WTM). All of these stocks’ market caps are closest to OSTK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRG | 27 | 298150 | -10 |
| BECN | 20 | 242330 | 0 |
| CDNA | 29 | 637935 | 1 |
| ENIC | 7 | 14536 | 0 |
| ENLC | 10 | 26653 | 0 |
| BOH | 14 | 40805 | -1 |
| WTM | 14 | 202682 | -3 |
| Average | 17.3 | 209013 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $209 million. That figure was $258 million in OSTK’s case. CareDx, Inc. (NASDAQ:CDNA) is the most popular stock in this table. On the other hand Enel Chile S.A. (NYSE:ENIC) is the least popular one with only 7 bullish hedge fund positions. Overstock.com, Inc. (NASDAQ:OSTK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OSTK is 71.3. 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 positive signal but 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately OSTK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OSTK were disappointed as the stock returned -0.1% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
