Is ORIX Corporation (NYSE:IX) 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.
Is ORIX Corporation (NYSE:IX) the right pick for your portfolio? Money managers were buying. The number of bullish hedge fund positions inched up by 2 recently. ORIX Corporation (NYSE:IX) was in 5 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. Our calculations also showed that IX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 3 hedge funds in our database with IX holdings at the end of December.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a glance at the latest hedge fund action regarding ORIX Corporation (NYSE:IX).
Do Hedge Funds Think IX Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in IX a year ago. So, let’s see 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 ORIX Corporation (NYSE:IX), which was worth $3.7 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $0.3 million worth of shares. Arrowstreet Capital, Fisher Asset Management, and Marshall Wace LLP 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 D E Shaw allocated the biggest weight to ORIX Corporation (NYSE:IX), around 0.0036% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, designating 0.0011 percent of its 13F equity portfolio to IX.
Consequently, some big names were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in ORIX Corporation (NYSE:IX). Arrowstreet Capital had $0.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $0.2 million position during the quarter.
Let’s go over hedge fund activity in other stocks similar to ORIX Corporation (NYSE:IX). These stocks are Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Ingersoll Rand Inc. (NYSE:IR), Generac Holdings Inc. (NYSE:GNRC), Tractor Supply Company (NASDAQ:TSCO), Hewlett Packard Enterprise Company (NYSE:HPE), Western Digital Corporation (NASDAQ:WDC), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO). This group of stocks’ market values resemble IX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HZNP | 48 | 4177404 | -7 |
| IR | 35 | 789022 | 1 |
| GNRC | 36 | 699301 | 4 |
| TSCO | 29 | 1191886 | -10 |
| HPE | 27 | 1067351 | -3 |
| WDC | 58 | 1913662 | 14 |
| TTWO | 41 | 822415 | -14 |
| Average | 39.1 | 1523006 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.1 hedge funds with bullish positions and the average amount invested in these stocks was $1523 million. That figure was $5 million in IX’s case. Western Digital Corporation (NASDAQ:WDC) is the most popular stock in this table. On the other hand Hewlett Packard Enterprise Company (NYSE:HPE) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks ORIX Corporation (NYSE:IX) is even less popular than HPE. Our overall hedge fund sentiment score for IX is 28.4. 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. Hedge funds dodged a bullet by taking a bearish stance towards IX. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market again by 6.1 percentage points. Unfortunately IX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); IX investors were disappointed as the stock returned 0.5% since the end of the first quarter (through 6/18) 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 most of these stocks already outperformed the market since 2019.
Follow O R I X Corp (NYSE:IX)
Follow O R I X Corp (NYSE:IX)
Disclosure: None. This article was originally published at Insider Monkey.
