Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards OneMain Holdings Inc (NYSE:OMF) changed recently.
Hedge fund interest in OneMain Holdings Inc (NYSE:OMF) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that OMF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare OMF to other stocks including Plains All American Pipeline, L.P. (NYSE:PAA), Companhia Siderurgica Nacional (NYSE:SID), and Polaris Inc. (NYSE:PII) to get a better sense of its popularity.
Matthew Lindenbaum of Basswood Capital
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 check out the latest hedge fund action encompassing OneMain Holdings Inc (NYSE:OMF).
Do Hedge Funds Think OMF Is A Good Stock To Buy Now?
At the end of September, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OMF over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the biggest position in OneMain Holdings Inc (NYSE:OMF), worth close to $147.1 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Matthew Lindenbaum of Basswood Capital, with a $129.1 million position; 5.2% of its 13F portfolio is allocated to the company. Remaining members of the smart money that hold long positions encompass David Zorub’s Parsifal Capital Management, Bill Miller’s Miller Value Partners and Steven Tananbaum’s GoldenTree Asset Management. In terms of the portfolio weights assigned to each position Parsifal Capital Management allocated the biggest weight to OneMain Holdings Inc (NYSE:OMF), around 7.61% of its 13F portfolio. Second Curve Capital is also relatively very bullish on the stock, earmarking 5.53 percent of its 13F equity portfolio to OMF.
Since OneMain Holdings Inc (NYSE:OMF) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few fund managers that decided to sell off their full holdings in the third quarter. At the top of the heap, Renaissance Technologies sold off the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising close to $22.4 million in stock, and Parvinder Thiara’s Athanor Capital was right behind this move, as the fund dumped about $17.4 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as OneMain Holdings Inc (NYSE:OMF) but similarly valued. We will take a look at Plains All American Pipeline, L.P. (NYSE:PAA), Companhia Siderurgica Nacional (NYSE:SID), Polaris Inc. (NYSE:PII), Gildan Activewear Inc (NYSE:GIL), Rocket Lab USA Inc. (NASDAQ:RKLB), Dun & Bradstreet Corporation (NYSE:DNB), and ShockWave Medical, Inc. (NASDAQ:SWAV). This group of stocks’ market caps are closest to OMF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PAA | 7 | 51655 | 0 |
| SID | 11 | 46539 | -1 |
| PII | 15 | 287576 | -5 |
| GIL | 18 | 687770 | -1 |
| RKLB | 26 | 588996 | 26 |
| DNB | 33 | 627041 | -12 |
| SWAV | 25 | 264209 | -2 |
| Average | 19.3 | 364827 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $365 million. That figure was $1047 million in OMF’s case. Dun & Bradstreet Corporation (NYSE:DNB) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NYSE:PAA) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks OneMain Holdings Inc (NYSE:OMF) is more popular among hedge funds. Our overall hedge fund sentiment score for OMF is 83.6. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately OMF wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on OMF were disappointed as the stock returned -8.8% since the end of the third quarter (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 most of these stocks already outperformed the market since 2019.
Follow Onemain Holdings Inc. (NYSE:OMF)
Follow Onemain Holdings Inc. (NYSE:OMF)
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Disclosure: None. This article was originally published at Insider Monkey.
