The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Otis Worldwide Corporation (NYSE:OTIS).
Otis Worldwide Corporation (NYSE:OTIS) has experienced an increase in activity from the world’s largest hedge funds of late. Otis Worldwide Corporation (NYSE:OTIS) was in 46 hedge funds’ portfolios at the end of September. The all time high for this statistic is 59. Our calculations also showed that OTIS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Aaron Cowen of Suvretta Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s take a look at the recent hedge fund action surrounding Otis Worldwide Corporation (NYSE:OTIS).
Do Hedge Funds Think OTIS Is A Good Stock To Buy Now?
At third quarter’s end, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the second quarter of 2021. On the other hand, there were a total of 53 hedge funds with a bullish position in OTIS a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Otis Worldwide Corporation (NYSE:OTIS) was held by Ako Capital, which reported holding $394.6 million worth of stock at the end of September. It was followed by Deccan Value Advisors with a $375.9 million position. Other investors bullish on the company included Suvretta Capital Management, Gates Capital Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Deccan Value Advisors allocated the biggest weight to Otis Worldwide Corporation (NYSE:OTIS), around 14.87% of its 13F portfolio. Gates Capital Management is also relatively very bullish on the stock, dishing out 5.53 percent of its 13F equity portfolio to OTIS.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Alyeska Investment Group, managed by Anand Parekh, initiated the most outsized position in Otis Worldwide Corporation (NYSE:OTIS). Alyeska Investment Group had $37.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $35.4 million position during the quarter. The following funds were also among the new OTIS investors: Israel Englander’s Millennium Management, Donald Sussman’s Paloma Partners, and Jinghua Yan’s TwinBeech Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Otis Worldwide Corporation (NYSE:OTIS) but similarly valued. These stocks are AFLAC Incorporated (NYSE:AFL), The Hershey Company (NYSE:HSY), NatWest Group plc (NYSE:NWG), Welltower Inc. (NYSE:WELL), TransDigm Group Incorporated (NYSE:TDG), Rockwell Automation Inc. (NYSE:ROK), and First Republic Bank (NYSE:FRC). This group of stocks’ market values are closest to OTIS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AFL | 34 | 223946 | 1 |
| HSY | 33 | 1274071 | -5 |
| NWG | 7 | 8068 | 2 |
| WELL | 22 | 508861 | 3 |
| TDG | 63 | 7188554 | 6 |
| ROK | 29 | 519693 | 4 |
| FRC | 35 | 918312 | 1 |
| Average | 31.9 | 1520215 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.9 hedge funds with bullish positions and the average amount invested in these stocks was $1520 million. That figure was $2207 million in OTIS’s case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand NatWest Group plc (NYSE:NWG) is the least popular one with only 7 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 64.2. 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 28.6% in 2021 through November 30th 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 -2% since the end of September (through 11/30) 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.
