Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Uniti Group Inc. (NASDAQ:UNIT).
Uniti Group Inc. (NASDAQ:UNIT) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of March. Our calculations also showed that UNIT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Nova Measuring Instruments Ltd. (NASDAQ:NVMI), Manchester United PLC (NYSE:MANU), and Skyline Champion Corporation (NYSE:SKY) to gather more data points.
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Michael Gelband of ExodusPoint 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. Now we’re going to take a look at the latest hedge fund action encompassing Uniti Group Inc. (NASDAQ:UNIT).
Do Hedge Funds Think UNIT Is A Good Stock To Buy Now?
At first quarter’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards UNIT 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.
Among these funds, Elliott Investment Management held the most valuable stake in Uniti Group Inc. (NASDAQ:UNIT), which was worth $225.8 million at the end of the fourth quarter. On the second spot was Oaktree Capital Management which amassed $37.5 million worth of shares. Two Sigma Advisors, Renaissance Technologies, and GLG Partners 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 Zeno Research allocated the biggest weight to Uniti Group Inc. (NASDAQ:UNIT), around 3.29% of its 13F portfolio. Elliott Investment Management is also relatively very bullish on the stock, designating 1.68 percent of its 13F equity portfolio to UNIT.
Seeing as Uniti Group Inc. (NASDAQ:UNIT) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers that decided to sell off their positions entirely last quarter. Interestingly, Michael Burry’s Scion Asset Management cut the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $8.5 million in stock, and Valerie Malter’s Matarin Capital was right behind this move, as the fund dumped about $2.5 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Uniti Group Inc. (NASDAQ:UNIT). We will take a look at Nova Measuring Instruments Ltd. (NASDAQ:NVMI), Manchester United PLC (NYSE:MANU), Skyline Champion Corporation (NYSE:SKY), Vericel Corp (NASDAQ:VCEL), RLJ Lodging Trust (NYSE:RLJ), TransAlta Corporation (NYSE:TAC), and Innospec Inc. (NASDAQ:IOSP). This group of stocks’ market caps are similar to UNIT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NVMI | 16 | 342917 | 0 |
| MANU | 16 | 47723 | 5 |
| SKY | 23 | 279371 | 0 |
| VCEL | 18 | 109350 | -6 |
| RLJ | 14 | 70067 | 4 |
| TAC | 11 | 86696 | -5 |
| IOSP | 9 | 116450 | -4 |
| Average | 15.3 | 150368 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $150 million. That figure was $307 million in UNIT’s case. Skyline Champion Corporation (NYSE:SKY) is the most popular stock in this table. On the other hand Innospec Inc. (NASDAQ:IOSP) is the least popular one with only 9 bullish hedge fund positions. Uniti Group Inc. (NASDAQ:UNIT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UNIT is 51.8. 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 positive signal but 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 beat the market again by 10.1 percentage points. Unfortunately UNIT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UNIT were disappointed as the stock returned 2.2% 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 many of these stocks already outperformed the market since 2019.
Follow Uniti Group Inc. (NASDAQ:UNIT)
Follow Uniti Group Inc. (NASDAQ:UNIT)
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Disclosure: None. This article was originally published at Insider Monkey.
