In this article we will take a look at whether hedge funds think Old National Bancorp (NASDAQ:ONB) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Old National Bancorp (NASDAQ:ONB) ready to rally soon? The best stock pickers were becoming hopeful. The number of long hedge fund positions advanced by 6 recently. Old National Bancorp (NASDAQ:ONB) was in 17 hedge funds’ portfolios at the end of March. The all time high for this statistic is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ONB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the 21st century investor’s toolkit there are a large number of formulas investors employ to appraise stocks. Two of the most underrated formulas are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top fund managers can trounce the market by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Matthew Lindenbaum of Basswood Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. With all of this in mind let’s take a look at the fresh hedge fund action surrounding Old National Bancorp (NASDAQ:ONB).
Do Hedge Funds Think ONB Is A Good Stock To Buy Now?
At the end of March, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 55% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ONB over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Old National Bancorp (NASDAQ:ONB) was held by GLG Partners, which reported holding $11.3 million worth of stock at the end of December. It was followed by Millennium Management with a $11.2 million position. Other investors bullish on the company included PEAK6 Capital Management, Basswood Capital, and D E Shaw. In terms of the portfolio weights assigned to each position JCSD Capital allocated the biggest weight to Old National Bancorp (NASDAQ:ONB), around 0.79% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, designating 0.44 percent of its 13F equity portfolio to ONB.
Consequently, some big names have jumped into Old National Bancorp (NASDAQ:ONB) headfirst. Millennium Management, managed by Israel Englander, initiated the largest position in Old National Bancorp (NASDAQ:ONB). Millennium Management had $11.2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $5.3 million investment in the stock during the quarter. The following funds were also among the new ONB investors: Michael Gelband’s ExodusPoint Capital, Brandon Haley’s Holocene Advisors, and Qing Li’s Sciencast Management.
Let’s go over hedge fund activity in other stocks similar to Old National Bancorp (NASDAQ:ONB). We will take a look at Root, Inc. (NASDAQ:ROOT), Insperity Inc (NYSE:NSP), Colony Capital Inc (NYSE:CLNY), Pebblebrook Hotel Trust (NYSE:PEB), Option Care Health, Inc. (NASDAQ:OPCH), Walker & Dunlop Inc. (NYSE:WD), and FibroGen Inc (NASDAQ:FGEN). This group of stocks’ market caps resemble ONB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ROOT | 18 | 346606 | -7 |
| NSP | 20 | 226976 | -5 |
| CLNY | 25 | 592790 | 4 |
| PEB | 10 | 48298 | -6 |
| OPCH | 31 | 373980 | 7 |
| WD | 19 | 110380 | 0 |
| FGEN | 18 | 246707 | -3 |
| Average | 20.1 | 277962 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $278 million. That figure was $51 million in ONB’s case. Option Care Health, Inc. (NASDAQ:OPCH) is the most popular stock in this table. On the other hand Pebblebrook Hotel Trust (NYSE:PEB) is the least popular one with only 10 bullish hedge fund positions. Old National Bancorp (NASDAQ:ONB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ONB is 56.7. 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 negative signal and 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately ONB wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ONB investors were disappointed as the stock returned -16.3% since the end of March (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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
