Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by nearly 10 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Organovo Holdings Inc (NASDAQ:ONVO).
Organovo Holdings Inc (NASDAQ:ONVO) has experienced an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that ONVO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David Harding of Winton Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to check out the new hedge fund action surrounding Organovo Holdings Inc (NASDAQ:ONVO).
What does smart money think about Organovo Holdings Inc (NASDAQ:ONVO)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ONVO over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, founded by Jim Simons, holds the largest position in Organovo Holdings Inc (NASDAQ:ONVO). Renaissance Technologies has a $1.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is David Harding of Winton Capital Management, with a $0.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism encompass Israel Englander’s Millennium Management, Donald Sussman’s Paloma Partners and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Organovo Holdings Inc (NASDAQ:ONVO), around 0.0014% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0014 percent of its 13F equity portfolio to ONVO.
Now, specific money managers have jumped into Organovo Holdings Inc (NASDAQ:ONVO) headfirst. Winton Capital Management, managed by David Harding, initiated the most valuable position in Organovo Holdings Inc (NASDAQ:ONVO). Winton Capital Management had $0.1 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Organovo Holdings Inc (NASDAQ:ONVO) but similarly valued. We will take a look at Gulf Resources, Inc. (NASDAQ:GURE), Performance Shipping Inc. (NASDAQ:DCIX), Celsion Corporation (NASDAQ:CLSN), and FSB Bancorp, Inc. (NASDAQ:FSBC). This group of stocks’ market valuations resemble ONVO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GURE | 1 | 1276 | -1 |
| DCIX | 1 | 185 | 0 |
| CLSN | 3 | 316 | 1 |
| FSBC | 4 | 5687 | 0 |
| Average | 2.25 | 1866 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.25 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $2 million in ONVO’s case. FSB Bancorp, Inc. (NASDAQ:FSBC) is the most popular stock in this table. On the other hand Gulf Resources, Inc. (NASDAQ:GURE) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Organovo Holdings Inc (NASDAQ:ONVO) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on ONVO as the stock returned 92.3% during the first two months of Q4 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
