Hedge Funds Are Crazy About United Therapeutics Corporation (UTHR)

In this article you are going to find out whether hedge funds think United Therapeutics Corporation (NASDAQ:UTHR) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is United Therapeutics Corporation (NASDAQ:UTHR) a healthy stock for your portfolio? Prominent investors were becoming hopeful. The number of long hedge fund bets moved up by 7 recently. United Therapeutics Corporation (NASDAQ:UTHR) was in 52 hedge funds’ portfolios at the end of September. The all time high for this statistic is 45. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that UTHR isn’t 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 let’s review the new hedge fund action encompassing United Therapeutics Corporation (NASDAQ:UTHR).

Kamran Moghtaderi of Eversept Partners

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

At the end of the third quarter, a total of 52 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in UTHR a year ago. 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 United Therapeutics Corporation (NASDAQ:UTHR) was held by Renaissance Technologies, which reported holding $559 million worth of stock at the end of September. It was followed by Avoro Capital Advisors (venBio Select Advisor) with a $553.7 million position. Other investors bullish on the company included Palo Alto Investors, AQR Capital Management, and Eversept Partners. In terms of the portfolio weights assigned to each position Consonance Capital Management allocated the biggest weight to United Therapeutics Corporation (NASDAQ:UTHR), around 15.95% of its 13F portfolio. Avoro Capital Advisors (venBio Select Advisor) is also relatively very bullish on the stock, designating 8.7 percent of its 13F equity portfolio to UTHR.

Now, key hedge funds have been driving this bullishness. Soleus Capital, managed by Guy Levy, initiated the most outsized position in United Therapeutics Corporation (NASDAQ:UTHR). Soleus Capital had $18.8 million invested in the company at the end of the quarter. Kevin Molloy’s Iron Triangle Partners also initiated a $12.9 million position during the quarter. The other funds with brand new UTHR positions are Israel Englander’s Millennium Management, Prashanth Jayaram’s Tri Locum Partners, and Jinghua Yan’s TwinBeech Capital.

Let’s now review hedge fund activity in other stocks similar to United Therapeutics Corporation (NASDAQ:UTHR). These stocks are AGNC Investment Corp. (NASDAQ:AGNC), First Citizens BancShares Inc. (NASDAQ:FCNCA), The New York Times Company (NYSE:NYT), Huaneng Power International Inc (NYSE:HNP), Vistra Corp. (NYSE:VST), Berry Global Group Inc (NYSE:BERY), and Aspen Technology, Inc. (NASDAQ:AZPN). All of these stocks’ market caps resemble UTHR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $918 million. That figure was $2178 million in UTHR’s case. The New York Times Company (NYSE:NYT) is the most popular stock in this table. On the other hand Huaneng Power International Inc (NYSE:HNP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks United Therapeutics Corporation (NASDAQ:UTHR) is more popular among hedge funds. Our overall hedge fund sentiment score for UTHR 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 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 UTHR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UTHR were disappointed as the stock returned 2.7% 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.

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