After several tireless days we have finished crunching the numbers from nearly 817 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 September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards OncoCyte Corporation (NYSE:OCX).
Is OncoCyte Corporation (NYSE:OCX) the right pick for your portfolio? Hedge funds were getting less bullish. The number of long hedge fund bets were cut by 2 in recent months. OncoCyte Corporation (NYSE:OCX) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 7. Our calculations also showed that OCX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 7 hedge funds in our database with OCX positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let’s take a peek at the fresh hedge fund action regarding OncoCyte Corporation (NYSE:OCX).
What have hedge funds been doing with OncoCyte Corporation (NYSE:OCX)?
Heading into the fourth quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in OCX a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
The largest stake in OncoCyte Corporation (NYSE:OCX) was held by Broadwood Capital, which reported holding $20.5 million worth of stock at the end of September. It was followed by Pura Vida Investments with a $8.4 million position. Other investors bullish on the company included P.A.W. CAPITAL PARTNERS, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Broadwood Capital allocated the biggest weight to OncoCyte Corporation (NYSE:OCX), around 1.61% of its 13F portfolio. Pura Vida Investments is also relatively very bullish on the stock, setting aside 0.43 percent of its 13F equity portfolio to OCX.
Since OncoCyte Corporation (NYSE:OCX) has faced falling interest from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies who sold off their entire stakes last quarter. Intriguingly, Daniel Kim’s Blackcrane Capital cut the biggest position of all the hedgies followed by Insider Monkey, valued at an estimated $5.7 million in stock, and Renaissance Technologies was right behind this move, as the fund sold off about $0.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as OncoCyte Corporation (NYSE:OCX) but similarly valued. These stocks are Lipocine Inc (NASDAQ:LPCN), Frequency Electronics, Inc. (NASDAQ:FEIM), China Automotive Systems, Inc. (NASDAQ:CAAS), NeuroBo Pharmaceuticals, Inc. (NASDAQ:NRBO), Riverview Bancorp, Inc. (NASDAQ:RVSB), CONSOL Coal Resources LP (NYSE:CCR), and California BanCorp (NASDAQ:CALB). This group of stocks’ market caps are closest to OCX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LPCN | 3 | 663 | -1 |
| FEIM | 4 | 9778 | 0 |
| CAAS | 1 | 1503 | 0 |
| NRBO | 2 | 1406 | -1 |
| RVSB | 10 | 4842 | 1 |
| CCR | 2 | 18344 | 0 |
| CALB | 3 | 3468 | -1 |
| Average | 3.6 | 5715 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.6 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $29 million in OCX’s case. Riverview Bancorp, Inc. (NASDAQ:RVSB) is the most popular stock in this table. On the other hand China Automotive Systems, Inc. (NASDAQ:CAAS) is the least popular one with only 1 bullish hedge fund positions. OncoCyte Corporation (NYSE:OCX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OCX is 46.7. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on OCX as the stock returned 28.8% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
