With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was United Therapeutics Corporation (NASDAQ:UTHR).
United Therapeutics Corporation (NASDAQ:UTHR) has experienced an increase in hedge fund sentiment lately. United Therapeutics Corporation (NASDAQ:UTHR) was in 45 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 42. 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 Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. Keeping this in mind let’s check out the latest hedge fund action surrounding United Therapeutics Corporation (NASDAQ:UTHR).
Do Hedge Funds Think UTHR Is A Good Stock To Buy Now?
At the end of June, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. On the other hand, there were a total of 41 hedge funds with a bullish position in UTHR a year ago. So, let’s examine 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 $558 million worth of stock at the end of June. It was followed by Avoro Capital Advisors (venBio Select Advisor) with a $538.2 million position. Other investors bullish on the company included Palo Alto Investors, Perceptive Advisors, and Millennium Management. In terms of the portfolio weights assigned to each position Avoro Capital Advisors (venBio Select Advisor) allocated the biggest weight to United Therapeutics Corporation (NASDAQ:UTHR), around 9.36% of its 13F portfolio. Palo Alto Investors is also relatively very bullish on the stock, earmarking 6.79 percent of its 13F equity portfolio to UTHR.
Now, specific money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, initiated the most valuable position in United Therapeutics Corporation (NASDAQ:UTHR). Point72 Asset Management had $99.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $21.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Dan Kozlowski’s Plaisance Capital, and Greg Poole’s Echo Street Capital Management.
Let’s now review hedge fund activity in other stocks similar to United Therapeutics Corporation (NASDAQ:UTHR). We will take a look at YETI Holdings, Inc. (NYSE:YETI), Kinross Gold Corporation (NYSE:KGC), Mobile TeleSystems OJSC (NYSE:MBT), Autohome Inc (NYSE:ATHM), Gentex Corporation (NASDAQ:GNTX), Donaldson Company, Inc. (NYSE:DCI), and Amedisys Inc (NASDAQ:AMED). This group of stocks’ market values are closest to UTHR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YETI | 34 | 282409 | 4 |
| KGC | 28 | 360274 | 1 |
| MBT | 10 | 293155 | -1 |
| ATHM | 16 | 344855 | -2 |
| GNTX | 34 | 440659 | -1 |
| DCI | 21 | 258723 | -7 |
| AMED | 26 | 271283 | 0 |
| Average | 24.1 | 321623 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $322 million. That figure was $2334 million in UTHR’s case. YETI Holdings, Inc. (NYSE:YETI) is the most popular stock in this table. On the other hand Mobile TeleSystems OJSC (NYSE:MBT) is the least popular one with only 10 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 88. 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 returned 22.9% in 2021 through October 1st but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on UTHR as the stock returned 3.6% since the end of June (through 10/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow United Therapeutics Corp (NASDAQ:UTHR)
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Disclosure: None. This article was originally published at Insider Monkey.
