We can judge whether OneSmart International Education Group Limited (NYSE:ONE) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Is OneSmart International Education Group Limited (NYSE:ONE) a great stock to buy now? Money managers are getting more optimistic. The number of bullish hedge fund bets went up by 2 in recent months. Our calculations also showed that ONE isn’t among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a look at the key hedge fund action encompassing OneSmart International Education Group Limited (NYSE:ONE).
Hedge fund activity in OneSmart International Education Group Limited (NYSE:ONE)
At Q4’s end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in ONE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Yiheng Capital was the largest shareholder of OneSmart International Education Group Limited (NYSE:ONE), with a stake worth $30.4 million reported as of the end of December. Trailing Yiheng Capital was Indus Capital, which amassed a stake valued at $5.7 million. Tiger Global Management LLC, Sensato Capital Management, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, specific money managers have jumped into OneSmart International Education Group Limited (NYSE:ONE) headfirst. Yiheng Capital, managed by Jonathan Guo, initiated the largest position in Higher One Holdings, Inc (NYSE:ONE). Yiheng Capital had $30.4 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $0.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as OneSmart International Education Group Limited (NYSE:ONE) but similarly valued. These stocks are Rubius Therapeutics, Inc. (NASDAQ:RUBY), Global Net Lease, Inc. (NYSE:GNL), The Liberty Braves Group (NASDAQ:BATRK), and The E.W. Scripps Company (NASDAQ:SSP). All of these stocks’ market caps are closest to ONE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUBY | 3 | 15917 | -4 |
| GNL | 7 | 34895 | 4 |
| BATRK | 27 | 346098 | 1 |
| SSP | 14 | 168564 | 2 |
| Average | 12.75 | 141369 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $141 million. That figure was $40 million in ONE’s case. Liberty Media Corporation (NASDAQ:BATRK) is the most popular stock in this table. On the other hand Rubius Therapeutics, Inc. (NASDAQ:RUBY) is the least popular one with only 3 bullish hedge fund positions. OneSmart International Education Group Limited (NYSE:ONE) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately ONE wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); ONE investors were disappointed as the stock returned 6.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
