Is Owens Corning (NYSE:OC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Owens Corning (NYSE:OC) was in 40 hedge funds’ portfolios at the end of the third quarter of 2019. OC shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 34 hedge funds in our database with OC positions at the end of the previous quarter. Our calculations also showed that OC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Below we compared OC’s hedge fund sentiment against its peers such as WABCO Holdings Inc. (NYSE:WBC), Starwood Property Trust, Inc. (NYSE:STWD), Algonquin Power & Utilities Corp. (NYSE:AQN), and Bruker Corporation (NASDAQ:BRKR).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are plenty of tools market participants employ to grade their holdings. A duo of the most innovative tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite fund managers can outclass the S&P 500 by a superb amount (see the details here).
Lee Ainslie of Maverick Capital
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to review the new hedge fund action surrounding Owens Corning (NYSE:OC).
What does smart money think about Owens Corning (NYSE:OC)?
Heading into the fourth quarter of 2019, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. By comparison, 32 hedge funds held shares or bullish call options in OC a year ago. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of Owens Corning (NYSE:OC), with a stake worth $223.5 million reported as of the end of September. Trailing Citadel Investment Group was Long Pond Capital, which amassed a stake valued at $204.4 million. Maverick Capital, HG Vora Capital Management, and Adage Capital 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 HG Vora Capital Management allocated the biggest weight to Owens Corning (NYSE:OC), around 12.11% of its portfolio. Park Presidio Capital is also relatively very bullish on the stock, dishing out 6.69 percent of its 13F equity portfolio to OC.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Owens Corning (NYSE:OC) headfirst. Suvretta Capital Management, managed by Aaron Cowen, assembled the most valuable position in Owens Corning (NYSE:OC). Suvretta Capital Management had $40.4 million invested in the company at the end of the quarter. Josh Donfeld and David Rogers’s Castle Hook Partners also made a $31.1 million investment in the stock during the quarter. The other funds with brand new OC positions are Principal Global Investors’s Columbus Circle Investors, Brandon Haley’s Holocene Advisors, and Renaissance Technologies.
Let’s go over hedge fund activity in other stocks similar to Owens Corning (NYSE:OC). These stocks are WABCO Holdings Inc. (NYSE:WBC), Starwood Property Trust, Inc. (NYSE:STWD), Algonquin Power & Utilities Corp. (NYSE:AQN), and Bruker Corporation (NASDAQ:BRKR). This group of stocks’ market valuations resemble OC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WBC | 29 | 1218154 | -4 |
| STWD | 18 | 158291 | 4 |
| AQN | 15 | 211065 | 6 |
| BRKR | 21 | 272235 | -6 |
| Average | 20.75 | 464936 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $465 million. That figure was $1306 million in OC’s case. WABCO Holdings Inc. (NYSE:WBC) is the most popular stock in this table. On the other hand Algonquin Power & Utilities Corp. (NYSE:AQN) 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 calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on OC, though not to the same extent, as the stock returned 6.5% during the fourth quarter (through the end of November) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
