The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Old National Bancorp (NASDAQ:ONB).
Old National Bancorp (NASDAQ:ONB) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of the third quarter of 2019. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Envestnet Inc (NYSE:ENV), Telephone & Data Systems, Inc. (NYSE:TDS), and Navient Corp (NASDAQ:NAVI) to gather more data points. Our calculations also showed that ONB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most traders, hedge funds are viewed as underperforming, old investment vehicles of the past. While there are greater than 8000 funds trading at present, Our experts look at the crème de la crème of this club, around 750 funds. It is estimated that this group of investors command the lion’s share of all hedge funds’ total asset base, and by tailing their unrivaled stock picks, Insider Monkey has discovered various investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Matthew Lindenbaum of Basswood Capital
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. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the recent hedge fund action surrounding Old National Bancorp (NASDAQ:ONB).
How have hedgies been trading Old National Bancorp (NASDAQ:ONB)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ONB over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Basswood Capital held the most valuable stake in Old National Bancorp (NASDAQ:ONB), which was worth $9.5 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $7.1 million worth of shares. PEAK6 Capital Management, Private Capital Management, and GLG Partners 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 Basswood Capital allocated the biggest weight to Old National Bancorp (NASDAQ:ONB), around 0.69% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, designating 0.52 percent of its 13F equity portfolio to ONB.
Seeing as Old National Bancorp (NASDAQ:ONB) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of funds that elected to cut their entire stakes in the third quarter. At the top of the heap, Renaissance Technologies dropped the largest stake of the “upper crust” of funds followed by Insider Monkey, worth close to $0.8 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $0.3 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Old National Bancorp (NASDAQ:ONB). These stocks are Envestnet Inc (NYSE:ENV), Telephone & Data Systems, Inc. (NYSE:TDS), Navient Corp (NASDAQ:NAVI), and Apollo Commercial Real Est. Finance Inc (NYSE:ARI). This group of stocks’ market valuations are closest to ONB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ENV | 13 | 64119 | 0 |
| TDS | 26 | 301772 | 1 |
| NAVI | 30 | 448459 | 4 |
| ARI | 9 | 55577 | -4 |
| Average | 19.5 | 217482 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $23 million in ONB’s case. Navient Corp (NASDAQ:NAVI) is the most popular stock in this table. On the other hand Apollo Commercial Real Est. Finance Inc (NYSE:ARI) is the least popular one with only 9 bullish hedge fund positions. Old National Bancorp (NASDAQ:ONB) is not the least popular stock in this group but hedge fund interest is still below average. 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 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. Unfortunately ONB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ONB investors were disappointed as the stock returned 5.9% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.