After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Universal Display Corporation (NASDAQ:OLED).
Universal Display Corporation (NASDAQ:OLED) investors should be aware of a decrease in hedge fund interest lately. Universal Display Corporation (NASDAQ:OLED) was in 17 hedge funds’ portfolios at the end of March. The all time high for this statistic is 33. Our calculations also showed that OLED isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Gavin Saitowitz of Prelude Capital
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Do Hedge Funds Think OLED Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from one quarter earlier. On the other hand, there were a total of 24 hedge funds with a bullish position in OLED a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Universal Display Corporation (NASDAQ:OLED) was held by Citadel Investment Group, which reported holding $55.5 million worth of stock at the end of December. It was followed by Kayak Investment Partners with a $35.2 million position. Other investors bullish on the company included PEAK6 Capital Management, D E Shaw, and Millennium Management. In terms of the portfolio weights assigned to each position Kayak Investment Partners allocated the biggest weight to Universal Display Corporation (NASDAQ:OLED), around 4.54% of its 13F portfolio. BeaconLight Capital is also relatively very bullish on the stock, dishing out 0.44 percent of its 13F equity portfolio to OLED.
Due to the fact that Universal Display Corporation (NASDAQ:OLED) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of funds who were dropping their positions entirely by the end of the first quarter. It’s worth mentioning that Matthew Hulsizer’s PEAK6 Capital Management cut the largest stake of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $3.8 million in stock. Suraj Parkash Chopra’s fund, Force Hill Capital Management, also sold off its stock, about $3.4 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 7 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Universal Display Corporation (NASDAQ:OLED) but similarly valued. We will take a look at Playtika Holding Corp. (NASDAQ:PLTK), The Toro Company (NYSE:TTC), Booz Allen Hamilton Holding Corporation (NYSE:BAH), BorgWarner Inc. (NYSE:BWA), Zynga Inc (NASDAQ:ZNGA), Dropbox, Inc. (NASDAQ:DBX), and Cable One Inc (NYSE:CABO). This group of stocks’ market valuations match OLED’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLTK | 21 | 444574 | 21 |
| TTC | 32 | 1016572 | 1 |
| BAH | 29 | 178958 | 2 |
| BWA | 27 | 590548 | 0 |
| ZNGA | 47 | 1143096 | -5 |
| DBX | 31 | 775813 | -12 |
| CABO | 23 | 694559 | 6 |
| Average | 30 | 692017 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $692 million. That figure was $95 million in OLED’s case. Zynga Inc (NASDAQ:ZNGA) is the most popular stock in this table. On the other hand Playtika Holding Corp. (NASDAQ:PLTK) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Universal Display Corporation (NASDAQ:OLED) is even less popular than PLTK. Our overall hedge fund sentiment score for OLED is 13.5. 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. Hedge funds dodged a bullet by taking a bearish stance towards OLED. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd but managed to beat the market again by 10.1 percentage points. Unfortunately OLED wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); OLED investors were disappointed as the stock returned -5.8% since the end of the first quarter (through 7/23) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
