Here is What Hedge Funds Think About Universal Display Corporation (OLED)

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Universal Display Corporation (NASDAQ:OLED) to find out whether there were any major changes in hedge funds’ views.

Is Universal Display Corporation (NASDAQ:OLED) ready to rally soon? Prominent investors were turning bullish. The number of long hedge fund positions improved by 3 lately. Universal Display Corporation (NASDAQ:OLED) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 33. Our calculations also showed that OLED isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to take a look at the latest hedge fund action regarding Universal Display Corporation (NASDAQ:OLED).

Ian Wace of Marshall Wace

Do Hedge Funds Think OLED Is A Good Stock To Buy Now?

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the second quarter of 2021. By comparison, 20 hedge funds held shares or bullish call options in OLED 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.

More specifically, Citadel Investment Group was the largest shareholder of Universal Display Corporation (NASDAQ:OLED), with a stake worth $35.3 million reported as of the end of September. Trailing Citadel Investment Group was Kayak Investment Partners, which amassed a stake valued at $28.3 million. Millennium Management, Citadel Investment Group, and AQR 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 Kayak Investment Partners allocated the biggest weight to Universal Display Corporation (NASDAQ:OLED), around 4% of its 13F portfolio. Sciencast Management is also relatively very bullish on the stock, dishing out 0.35 percent of its 13F equity portfolio to OLED.

Now, key money managers were breaking ground themselves. TwinBeech Capital, managed by Jinghua Yan, established the most outsized position in Universal Display Corporation (NASDAQ:OLED). TwinBeech Capital had $4.6 million invested in the company at the end of the quarter. Peter Algert’s Algert Global also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital), Ran Pang’s Quantamental Technologies, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s check out hedge fund activity in other stocks similar to Universal Display Corporation (NASDAQ:OLED). These stocks are Scientific Games Corp (NASDAQ:SGMS), Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), Ciena Corporation (NASDAQ:CIEN), Zai Lab Limited (NASDAQ:ZLAB), FirstService Corporation (NASDAQ:FSV), WEX Inc (NYSE:WEX), and Gentex Corporation (NASDAQ:GNTX). All of these stocks’ market caps resemble OLED’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $761 million. That figure was $141 million in OLED’s case. Zai Lab Limited (NASDAQ:ZLAB) is the most popular stock in this table. On the other hand FirstService Corporation (NASDAQ:FSV) is the least popular one with only 14 bullish hedge fund positions. Universal Display Corporation (NASDAQ:OLED) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OLED is 58.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately OLED wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OLED were disappointed as the stock returned -7.9% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.