Did Hedge Funds Catch A Break With Uber Technologies, Inc. (UBER)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Uber Technologies, Inc. (NYSE:UBER) based on that data and determine whether they were really smart about the stock.

Uber Technologies, Inc. (NYSE:UBER) was in 143 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 135. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. UBER has experienced an increase in enthusiasm from smart money recently. There were 135 hedge funds in our database with UBER positions at the end of the second quarter. Our calculations also showed that UBER ranked #7 among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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. With all of this in mind we’re going to take a glance at the recent hedge fund action regarding Uber Technologies, Inc. (NYSE:UBER).

Brad Gerstner of Altimeter Capital

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

Heading into the fourth quarter of 2021, a total of 143 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 100 hedge funds with a bullish position in UBER a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Brad Gerstner’s Altimeter Capital Management has the largest position in Uber Technologies, Inc. (NYSE:UBER), worth close to $1.0976 billion, comprising 8.8% of its total 13F portfolio. The second most bullish fund manager is Tiger Global Management LLC, managed by Chase Coleman, which holds a $929.3 million position; 1.8% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism consist of Philippe Laffont’s Coatue Management, Steve Cohen’s Point72 Asset Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Tenzing Global Investors allocated the biggest weight to Uber Technologies, Inc. (NYSE:UBER), around 20.06% of its 13F portfolio. Marathon Partners is also relatively very bullish on the stock, designating 19.35 percent of its 13F equity portfolio to UBER.

As aggregate interest increased, key money managers have been driving this bullishness. Viking Global, managed by Andreas Halvorsen, established the most outsized position in Uber Technologies, Inc. (NYSE:UBER). Viking Global had $286.4 million invested in the company at the end of the quarter. Jimmy Levin’s Sculptor Capital also initiated a $201.9 million position during the quarter. The other funds with new positions in the stock are Keith Meister’s Corvex Capital, Bijan Modanlou, Joseph Bou-Saba, and Jayaveera Kodali’s Alta Park Capital, and Sahm Adrangi’s Kerrisdale Capital.

Let’s also examine hedge fund activity in other stocks similar to Uber Technologies, Inc. (NYSE:UBER). These stocks are Altria Group Inc (NYSE:MO), Brookfield Asset Management Inc. (NYSE:BAM), Mercadolibre Inc (NASDAQ:MELI), Blackstone Inc. (NYSE:BX), The PNC Financial Services Group Inc. (NYSE:PNC), Equinor ASA (NYSE:EQNR), and Canadian National Railway Company (NYSE:CNI). All of these stocks’ market caps are similar to UBER’s market cap.

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As you can see these stocks had an average of 41.9 hedge funds with bullish positions and the average amount invested in these stocks was $2615 million. That figure was $10767 million in UBER’s case. Mercadolibre Inc (NASDAQ:MELI) is the most popular stock in this table. On the other hand Equinor ASA (NYSE:EQNR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Uber Technologies, Inc. (NYSE:UBER) is more popular among hedge funds. Our overall hedge fund sentiment score for UBER is 97. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, UBER wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UBER were disappointed as the stock returned -16.5% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.

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