The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of Otis Worldwide Corporation (NYSE:OTIS).
Otis Worldwide Corporation (NYSE:OTIS) shareholders have witnessed a decrease in hedge fund sentiment recently. Otis Worldwide Corporation (NYSE:OTIS) was in 45 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 59. There were 52 hedge funds in our database with OTIS holdings at the end of March. Our calculations also showed that OTIS isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ricky Sandler of Eminence Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 take a gander at the recent hedge fund action regarding Otis Worldwide Corporation (NYSE:OTIS).
Do Hedge Funds Think OTIS Is A Good Stock To Buy Now?
At the end of June, a total of 45 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in OTIS over the last 24 quarters. 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, Ako Capital was the largest shareholder of Otis Worldwide Corporation (NYSE:OTIS), with a stake worth $405.6 million reported as of the end of June. Trailing Ako Capital was Deccan Value Advisors, which amassed a stake valued at $382 million. Gates Capital Management, Suvretta Capital Management, and Renaissance Technologies 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 Deccan Value Advisors allocated the biggest weight to Otis Worldwide Corporation (NYSE:OTIS), around 15.06% of its 13F portfolio. VGI Partners is also relatively very bullish on the stock, setting aside 7.42 percent of its 13F equity portfolio to OTIS.
Judging by the fact that Otis Worldwide Corporation (NYSE:OTIS) has experienced a decline in interest from hedge fund managers, it’s easy to see that there were a few money managers who were dropping their positions entirely last quarter. Interestingly, Andreas Halvorsen’s Viking Global said goodbye to the biggest investment of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $467.8 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund cut about $75 million worth. These moves are interesting, as total hedge fund interest fell by 7 funds last quarter.
Let’s also examine hedge fund activity in other stocks similar to Otis Worldwide Corporation (NYSE:OTIS). These stocks are SBA Communications Corporation (NASDAQ:SBAC), Corning Incorporated (NYSE:GLW), Welltower Inc. (NYSE:WELL), Nutrien Ltd. (NYSE:NTR), KKR & Co Inc. (NYSE:KKR), LyondellBasell Industries NV (NYSE:LYB), and Yum! Brands, Inc. (NYSE:YUM). All of these stocks’ market caps are similar to OTIS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBAC | 43 | 2156941 | 5 |
| GLW | 42 | 521738 | 10 |
| WELL | 19 | 427197 | -2 |
| NTR | 28 | 596869 | -5 |
| KKR | 54 | 5347811 | -2 |
| LYB | 41 | 888236 | -6 |
| YUM | 35 | 652331 | 3 |
| Average | 37.4 | 1513018 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.4 hedge funds with bullish positions and the average amount invested in these stocks was $1513 million. That figure was $2407 million in OTIS’s case. KKR & Co Inc. (NYSE:KKR) is the most popular stock in this table. On the other hand Welltower Inc. (NYSE:WELL) is the least popular one with only 19 bullish hedge fund positions. Otis Worldwide Corporation (NYSE:OTIS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OTIS is 58. 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 22.9% in 2021 through October 1st and beat the market again by 5.6 percentage points. Unfortunately OTIS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OTIS were disappointed as the stock returned 1.2% since the end of June (through 10/1) 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.
Follow Otis Worldwide Corp (NYSE:OTIS)
Follow Otis Worldwide Corp (NYSE:OTIS)
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Disclosure: None. This article was originally published at Insider Monkey.
