As we already know from media reports and hedge fund investor letters, many hedge funds lost money in October, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about OGE Energy Corp. (NYSE:OGE) in this article.
Is OGE Energy Corp. (NYSE:OGE) a buy here? Investors who are in the know are in a bullish mood. The number of long hedge fund bets increased by 3 lately. Our calculations also showed that oge isn’t among the 30 most popular stocks among hedge funds.
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 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
We’re going to take a peek at the recent hedge fund action encompassing OGE Energy Corp. (NYSE:OGE).
What does the smart money think about OGE Energy Corp. (NYSE:OGE)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OGE over the last 13 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in OGE Energy Corp. (NYSE:OGE). Renaissance Technologies has a $81.4 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which holds a $69 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers that are bullish comprise Israel Englander’s Millennium Management, Noam Gottesman’s GLG Partners and Cliff Asness’s AQR Capital Management.
Consequently, specific money managers have jumped into OGE Energy Corp. (NYSE:OGE) headfirst. Point72 Asset Management, managed by Steve Cohen, established the largest position in OGE Energy Corp. (NYSE:OGE). Point72 Asset Management had $4.7 million invested in the company at the end of the quarter. Jeffrey Talpins’s Element Capital Management also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as OGE Energy Corp. (NYSE:OGE) but similarly valued. We will take a look at Santander Consumer USA Holdings Inc (NYSE:SC), Kilroy Realty Corp (NYSE:KRC), The Middleby Corporation (NASDAQ:MIDD), and ADT Inc. (NYSE:ADT). This group of stocks’ market values match OGE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SC | 26 | 490879 | 1 |
| KRC | 12 | 253236 | 0 |
| MIDD | 17 | 816140 | 3 |
| ADT | 19 | 147423 | 4 |
| Average | 18.5 | 426920 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $427 million. That figure was $264 million in OGE’s case. Santander Consumer USA Holdings Inc (NYSE:SC) is the most popular stock in this table. On the other hand Kilroy Realty Corp (NYSE:KRC) is the least popular one with only 12 bullish hedge fund positions. OGE Energy Corp. (NYSE:OGE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SC might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
