The 800+ 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 OGE Energy Corp. (NYSE:OGE).
Is OGE a good stock to buy now? Money managers were cutting their exposure. The number of bullish hedge fund bets retreated by 3 recently. OGE Energy Corp. (NYSE:OGE) was in 22 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 25. Our calculations also showed that OGE isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
According to most stock holders, hedge funds are perceived as slow, old financial tools of the past. While there are more than 8000 funds in operation at the moment, Our researchers hone in on the elite of this group, approximately 850 funds. It is estimated that this group of investors direct the lion’s share of all hedge funds’ total capital, and by keeping an eye on their top picks, Insider Monkey has figured out many investment strategies that have historically outperformed the market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Phillip Gross of Adage Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let’s check out the fresh hedge fund action encompassing OGE Energy Corp. (NYSE:OGE).
Do Hedge Funds Think OGE Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OGE over the last 21 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of OGE Energy Corp. (NYSE:OGE), with a stake worth $42.8 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $40 million. Citadel Investment Group, Adage Capital Management, 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 Neo Ivy Capital allocated the biggest weight to OGE Energy Corp. (NYSE:OGE), around 0.82% of its 13F portfolio. Cerebellum Capital is also relatively very bullish on the stock, earmarking 0.31 percent of its 13F equity portfolio to OGE.
Judging by the fact that OGE Energy Corp. (NYSE:OGE) has faced declining sentiment from hedge fund managers, we can see that there were a few fund managers that decided to sell off their entire stakes heading into Q4. At the top of the heap, Brian Olson, Baehyun Sung, and Jamie Waters’s Blackstart Capital cut the biggest stake of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $10.6 million in stock. Donald Sussman’s fund, Paloma Partners, also dropped its stock, about $1.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to OGE Energy Corp. (NYSE:OGE). These stocks are National Retail Properties, Inc. (NYSE:NNN), Kilroy Realty Corp (NYSE:KRC), Credit Acceptance Corp. (NASDAQ:CACC), Smartsheet Inc. (NYSE:SMAR), Dada Nexus Limited (NASDAQ:DADA), DCT Industrial Trust Inc. (NYSE:DCT), and American Financial Group (NYSE:AFG). This group of stocks’ market valuations are similar to OGE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NNN | 16 | 122717 | -1 |
| KRC | 19 | 327802 | -1 |
| CACC | 29 | 673470 | 6 |
| SMAR | 45 | 1661963 | -2 |
| DADA | 17 | 113051 | 0 |
| DCT | 21 | 222561 | 21 |
| AFG | 27 | 278715 | -1 |
| Average | 24.9 | 485754 | 3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $486 million. That figure was $216 million in OGE’s case. Smartsheet Inc. (NYSE:SMAR) is the most popular stock in this table. On the other hand National Retail Properties, Inc. (NYSE:NNN) is the least popular one with only 16 bullish hedge fund positions. OGE Energy Corp. (NYSE:OGE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OGE is 38.7. 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 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and surpassed the market again by 15.8 percentage points. Unfortunately OGE wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); OGE investors were disappointed as the stock returned 8.3% since the end of September (through 12/14) 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 most of these stocks already outperformed the market in 2020.
Follow Oge Energy Corp. (NYSE:OGE)
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Disclosure: None. This article was originally published at Insider Monkey.
