Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Unity Biotechnology, Inc. (NASDAQ:UBX).
Is Unity Biotechnology, Inc. (NASDAQ:UBX) worth your attention right now? The best stock pickers were becoming more confident. The number of bullish hedge fund positions moved up by 6 in recent months. Unity Biotechnology, Inc. (NASDAQ:UBX) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 7. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that UBX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 4 hedge funds in our database with UBX positions at the end of the first quarter.
To most investors, hedge funds are perceived as worthless, outdated investment vehicles of the past. While there are more than 8000 funds with their doors open at present, We choose to focus on the elite of this group, about 850 funds. These investment experts shepherd the lion’s share of the smart money’s total asset base, and by tailing their top stock picks, Insider Monkey has determined many investment strategies that have historically surpassed the market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .
Israel Englander of Millennium Management
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 we’re going to take a gander at the fresh hedge fund action surrounding Unity Biotechnology, Inc. (NASDAQ:UBX).
Do Hedge Funds Think UBX Is A Good Stock To Buy Now?
At the end of June, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 150% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in UBX over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Unity Biotechnology, Inc. (NASDAQ:UBX), with a stake worth $2.8 million reported as of the end of June. Trailing Millennium Management was Renaissance Technologies, which amassed a stake valued at $2.4 million. PDT Partners, Two Sigma Advisors, and D E Shaw 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 PDT Partners allocated the biggest weight to Unity Biotechnology, Inc. (NASDAQ:UBX), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.003 percent of its 13F equity portfolio to UBX.
Consequently, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, created the largest position in Unity Biotechnology, Inc. (NASDAQ:UBX). Millennium Management had $2.8 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $2.4 million position during the quarter. The following funds were also among the new UBX investors: D. E. Shaw’s D E Shaw, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks similar to Unity Biotechnology, Inc. (NASDAQ:UBX). These stocks are Civeo Corporation (NYSE:CVEO), Community Bankers Trust Corp. (NASDAQ:ESXB), VIA optronics AG (NYSE:VIAO), Exagen Inc. (NASDAQ:XGN), Bank of Commerce Holdings (NASDAQ:BOCH), Oil-Dri Corporation of America (NYSE:ODC), and Central Valley Community Bancorp (NASDAQ:CVCY). This group of stocks’ market caps are closest to UBX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVEO | 10 | 98760 | 1 |
| ESXB | 12 | 39044 | 6 |
| VIAO | 6 | 25022 | -2 |
| XGN | 6 | 19037 | -4 |
| BOCH | 6 | 19269 | 3 |
| ODC | 4 | 28962 | 0 |
| CVCY | 10 | 12604 | 7 |
| Average | 7.7 | 34671 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.7 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $7 million in UBX’s case. Community Bankers Trust Corp. (NASDAQ:ESXB) is the most popular stock in this table. On the other hand Oil-Dri Corporation of America (NYSE:ODC) is the least popular one with only 4 bullish hedge fund positions. Unity Biotechnology, Inc. (NASDAQ:UBX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UBX is 77.5. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately UBX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UBX were disappointed as the stock returned -34.5% since the end of June (through 9/27) 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 Unity Biotechnology Inc. (NASDAQ:UBX)
Follow Unity Biotechnology Inc. (NASDAQ:UBX)
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Disclosure: None. This article was originally published at Insider Monkey.
