Where Do Hedge Funds Stand On OneSmart International Education Group (ONE)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of OneSmart International Education Group Limited (NYSE:ONE).

Is OneSmart International Education Group Limited (NYSE:ONE) an attractive investment now? Investors who are in the know were getting more optimistic. The number of bullish hedge fund bets improved by 14 lately. OneSmart International Education Group Limited (NYSE:ONE) was in 20 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ONE 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 6 hedge funds in our database with ONE 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.

Michael Platt Bluecrest Capital Management
Michael Platt Bluecrest Capital Management

Michael Platt of BlueCrest Capital Mgmt.

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. Now we’re going to view the recent hedge fund action surrounding OneSmart International Education Group Limited (NYSE:ONE).

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

At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 233% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ONE over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is ONE A Good Stock To Buy?
Is ONE A Good Stock To Buy?

More specifically, Yiheng Capital was the largest shareholder of OneSmart International Education Group Limited (NYSE:ONE), with a stake worth $33.2 million reported as of the end of September. Trailing Yiheng Capital was Millennium Management, which amassed a stake valued at $20.2 million. Indus Capital, BlueCrest Capital Mgmt., and Glazer Capital 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 Old Well Partners allocated the biggest weight to OneSmart International Education Group Limited (NYSE:ONE), around 5.45% of its 13F portfolio. Element Capital Management is also relatively very bullish on the stock, designating 2.79 percent of its 13F equity portfolio to ONE.

With a general bullishness amongst the heavyweights, key money managers have jumped into OneSmart International Education Group Limited (NYSE:ONE) headfirst. Millennium Management, managed by Israel Englander, created the biggest position in OneSmart International Education Group Limited (NYSE:ONE). Millennium Management had $20.2 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also made a $13.6 million investment in the stock during the quarter. The following funds were also among the new ONE investors: Paul Glazer’s Glazer Capital, Alec Litowitz and Ross Laser’s Magnetar Capital, and Sander Gerber’s Hudson Bay Capital Management.

Let’s now review hedge fund activity in other stocks similar to OneSmart International Education Group Limited (NYSE:ONE). These stocks are Provention Bio, Inc. (NASDAQ:PRVB), Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), XPEL Inc. (NASDAQ:XPEL), Protagonist Therapeutics, Inc. (NASDAQ:PTGX), Cohu, Inc. (NASDAQ:COHU), German American Bancorp., Inc. (NASDAQ:GABC), and Collegium Pharmaceutical Inc (NASDAQ:COLL). This group of stocks’ market caps match ONE’s market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRVB,10,83998,-4 PLAY,16,202166,4 XPEL,12,16036,8 PTGX,13,276569,2 COHU,8,47643,-4 GABC,4,12514,0 COLL,17,227881,-3 Average,11.4,123830,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $170 million in ONE’s case. Collegium Pharmaceutical Inc (NASDAQ:COLL) is the most popular stock in this table. On the other hand German American Bancorp., Inc. (NASDAQ:GABC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks OneSmart International Education Group Limited (NYSE:ONE) is more popular among hedge funds. Our overall hedge fund sentiment score for ONE is 90. 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 December 14th and still beat the market by 15.8 percentage points. Unfortunately ONE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ONE were disappointed as the stock returned -15.8% since the end of the third quarter (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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

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