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 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of Open Text Corporation (NASDAQ:OTEX).
Open Text Corporation (NASDAQ:OTEX) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. OTEX was in 18 hedge funds’ portfolios at the end of the first quarter of 2020. There were 14 hedge funds in our database with OTEX positions at the end of the previous quarter. Our calculations also showed that OTEX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are dozens of tools stock market investors put to use to value their stock investments. A couple of the less utilized tools are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the broader indices by a healthy amount (see the details here).
Clifton Robbins of Blue Harbour Group
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a peek at the key hedge fund action surrounding Open Text Corporation (NASDAQ:OTEX).
How have hedgies been trading Open Text Corporation (NASDAQ:OTEX)?
Heading into the second quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in OTEX over the last 18 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Open Text Corporation (NASDAQ:OTEX) was held by Praesidium Investment Management Company, which reported holding $144.3 million worth of stock at the end of September. It was followed by Blue Harbour Group with a $115.7 million position. Other investors bullish on the company included GLG Partners, Renaissance Technologies, and Sunriver Management. In terms of the portfolio weights assigned to each position Blue Harbour Group allocated the biggest weight to Open Text Corporation (NASDAQ:OTEX), around 20.59% of its 13F portfolio. Praesidium Investment Management Company is also relatively very bullish on the stock, designating 11.67 percent of its 13F equity portfolio to OTEX.
As industrywide interest jumped, key money managers have been driving this bullishness. JS Capital, managed by Jonathan Soros, assembled the largest position in Open Text Corporation (NASDAQ:OTEX). JS Capital had $0.4 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also made a $0.3 million investment in the stock during the quarter. The other funds with brand new OTEX positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Matthew Hulsizer’s PEAK6 Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Open Text Corporation (NASDAQ:OTEX) but similarly valued. These stocks are ArcelorMittal (NYSE:MT), Tradeweb Markets Inc. (NASDAQ:TW), Cable One Inc (NYSE:CABO), and Carnival Corporation & Plc (NYSE:CCL). All of these stocks’ market caps are closest to OTEX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MT | 13 | 123110 | -4 |
| TW | 30 | 355406 | -6 |
| CABO | 23 | 674859 | 4 |
| CCL | 31 | 146189 | -3 |
| Average | 24.25 | 324891 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $325 million. That figure was $376 million in OTEX’s case. Carnival Corporation & Plc (NYSE:CCL) is the most popular stock in this table. On the other hand ArcelorMittal (NYSE:MT) is the least popular one with only 13 bullish hedge fund positions. Open Text Corporation (NASDAQ:OTEX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on OTEX, though not to the same extent, as the stock returned 25.5% during the second quarter and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
