As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Ondas Holdings Inc. (NASDAQ:ONDS).
Is ONDS a good stock to buy? Hedge funds were buying. The number of long hedge fund bets inched up by 2 in recent months. Ondas Holdings Inc. (NASDAQ:ONDS) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ONDS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint 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. Now let’s analyze the fresh hedge fund action encompassing Ondas Holdings Inc. (NASDAQ:ONDS).
Do Hedge Funds Think ONDS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from the fourth quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in ONDS 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.
Among these funds, Roubaix Capital held the most valuable stake in Ondas Holdings Inc. (NASDAQ:ONDS), which was worth $1.2 million at the end of the fourth quarter. On the second spot was Alyeska Investment Group which amassed $1 million worth of shares. Millennium Management, Citadel Investment Group, and ExodusPoint Capital 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 Roubaix Capital allocated the biggest weight to Ondas Holdings Inc. (NASDAQ:ONDS), around 0.79% of its 13F portfolio. Alyeska Investment Group is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to ONDS.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Ondas Holdings Inc. (NASDAQ:ONDS) headfirst. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Ondas Holdings Inc. (NASDAQ:ONDS). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.2 million position during the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Ondas Holdings Inc. (NASDAQ:ONDS) but similarly valued. We will take a look at AGM Group Holdings Inc. (NASDAQ:AGMH), PARTS iD, Inc. (NYSE:ID), Gran Tierra Energy Inc. (NYSE:GTE), Iteris Inc (NYSE:ITI), Oil-Dri Corporation of America (NYSE:ODC), Ucommune International Ltd (NASDAQ:UK), and Resonant Inc. (NASDAQ:RESN). This group of stocks’ market caps match ONDS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGMH | 1 | 144 | 0 |
| ID | 6 | 8061 | 2 |
| GTE | 6 | 36649 | -2 |
| ITI | 16 | 42326 | 4 |
| ODC | 4 | 29522 | 0 |
| UK | 4 | 705 | 1 |
| RESN | 6 | 5809 | 2 |
| Average | 6.1 | 17602 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.1 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $3 million in ONDS’s case. Iteris Inc (NYSE:ITI) is the most popular stock in this table. On the other hand AGM Group Holdings Inc. (NASDAQ:AGMH) is the least popular one with only 1 bullish hedge fund positions. Ondas Holdings Inc. (NASDAQ:ONDS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ONDS is 50.3. 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 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately ONDS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ONDS investors were disappointed as the stock returned -17.8% since the end of March (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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.