Were Hedge Funds Illusioned With 1Life Healthcare, Inc. (ONEM)?

Technology stocks had a lousy start to 2022. QQQ lost 9% of its value in January. Pandemic winners are getting crushed while energy stocks are surging. Roblox lost 36%, Moderna lost 33%, and Carvana and Shopify lost 30% of their values in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards 1Life Healthcare, Inc. (NASDAQ:ONEM) at the end of the third quarter and determine whether the smart money was really smart about this stock.

Is 1Life Healthcare, Inc. (NASDAQ:ONEM) a buy here? The best stock pickers were turning bullish. The number of long hedge fund bets went up by 1 recently. 1Life Healthcare, Inc. (NASDAQ:ONEM) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ONEM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 33 hedge funds in our database with ONEM holdings at the end of June.

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. Keeping this in mind we’re going to take a glance at the new hedge fund action surrounding 1Life Healthcare, Inc. (NASDAQ:ONEM).

Lee Ainslie of Maverick Capital

Do Hedge Funds Think ONEM Is A Good Stock To Buy Now?

At third quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in ONEM a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

More specifically, Tiger Global Management LLC was the largest shareholder of 1Life Healthcare, Inc. (NASDAQ:ONEM), with a stake worth $217.3 million reported as of the end of September. Trailing Tiger Global Management LLC was Maverick Capital, which amassed a stake valued at $74.1 million. ARK Investment Management, Cadian Capital, and Two Sigma Advisors 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 Sabrepoint Capital allocated the biggest weight to 1Life Healthcare, Inc. (NASDAQ:ONEM), around 4.52% of its 13F portfolio. Cadian Capital is also relatively very bullish on the stock, dishing out 2.74 percent of its 13F equity portfolio to ONEM.

Consequently, key hedge funds have jumped into 1Life Healthcare, Inc. (NASDAQ:ONEM) headfirst. Cadian Capital, managed by Eric Bannasch, created the most outsized position in 1Life Healthcare, Inc. (NASDAQ:ONEM). Cadian Capital had $72.5 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $15.3 million position during the quarter. The other funds with brand new ONEM positions are Joseph Samuels’s Islet Management, Frank Fu’s CaaS Capital, and George Baxter’s Sabrepoint Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as 1Life Healthcare, Inc. (NASDAQ:ONEM) but similarly valued. We will take a look at VIZIO Holding Corp. (NYSE:VZIO), Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), Pacific Premier Bancorp, Inc. (NASDAQ:PPBI), SunPower Corporation (NASDAQ:SPWR), VTEX (NYSE:VTEX), JBG SMITH Properties (NYSE:JBGS), and Adient plc (NYSE:ADNT). This group of stocks’ market values match ONEM’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.7 hedge funds with bullish positions and the average amount invested in these stocks was $257 million. That figure was $640 million in ONEM’s case. Adient plc (NYSE:ADNT) is the most popular stock in this table. On the other hand Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks 1Life Healthcare, Inc. (NASDAQ:ONEM) is more popular among hedge funds. Our overall hedge fund sentiment score for ONEM is 86. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, ONEM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ONEM were disappointed as the stock returned -44.9% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.