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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider The Unilever Group (NYSE:UL) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
The Unilever Group (NYSE:UL) was in 14 hedge funds’ portfolios at the end of September. UL has experienced an increase in hedge fund interest lately. There were 10 hedge funds in our database with UL holdings at the end of the previous quarter. Our calculations also showed that UL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Tom Gayner of Markel Gayner Asset Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a peek at the recent hedge fund action encompassing The Unilever Group (NYSE:UL).
What have hedge funds been doing with The Unilever Group (NYSE:UL)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 40% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards UL over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in The Unilever Group (NYSE:UL) was held by Arrowstreet Capital, which reported holding $215.9 million worth of stock at the end of September. It was followed by Markel Gayner Asset Management with a $91.8 million position. Other investors bullish on the company included Renaissance Technologies, Gabalex Capital, and Wallace Capital Management. In terms of the portfolio weights assigned to each position Lucas Capital Management allocated the biggest weight to The Unilever Group (NYSE:UL), around 2.5% of its 13F portfolio. Gabalex Capital is also relatively very bullish on the stock, dishing out 2.03 percent of its 13F equity portfolio to UL.
As one would reasonably expect, some big names were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, created the most valuable position in The Unilever Group (NYSE:UL). Balyasny Asset Management had $1 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $1 million investment in the stock during the quarter. The following funds were also among the new UL investors: Ken Griffin’s Citadel Investment Group, Mike Vranos’s Ellington, and John Zaro’s Bourgeon Capital.
Let’s check out hedge fund activity in other stocks similar to The Unilever Group (NYSE:UL). These stocks are The Unilever Group (NYSE:UN), Citigroup Inc. (NYSE:C), HSBC Holdings plc (NYSE:HSBC), and Abbott Laboratories (NYSE:ABT). This group of stocks’ market valuations resemble UL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UN | 15 | 1157802 | -1 |
| C | 94 | 10270591 | 11 |
| HSBC | 14 | 1124229 | -2 |
| ABT | 58 | 2062528 | 11 |
| Average | 45.25 | 3653788 | 4.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 45.25 hedge funds with bullish positions and the average amount invested in these stocks was $3654 million. That figure was $337 million in UL’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand HSBC Holdings plc (NYSE:HSBC) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks The Unilever Group (NYSE:UL) is even less popular than HSBC. Hedge funds dodged a bullet by taking a bearish stance towards UL. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately UL wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); UL investors were disappointed as the stock returned -0.3% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
