Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about UniFirst Corp (NYSE:UNF) in this article.
UniFirst Corp (NYSE:UNF) was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. UNF investors should be aware of a decrease in support from the world’s most elite money managers lately. There were 19 hedge funds in our database with UNF holdings at the end of the previous quarter. At the end of this article we will also compare UNF to other stocks including Marriott Vacations Worldwide Corp (NYSE:VAC), Swift Transportation Co (NYSE:SWFT), and Washington Federal Inc. (NASDAQ:WAFD) to get a better sense of its popularity.
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Follow Unifirst Corp (NYSE:UNF)
To the average investor there are dozens of signals market participants can use to size up their stock investments. Some of the best signals are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best fund managers can outclass the market by a superb margin (see the details here).
Keeping this in mind, let’s check out the recent action surrounding UniFirst Corp (NYSE:UNF).
How are hedge funds trading UniFirst Corp (NYSE:UNF)?
Heading into Q4, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chuck Royce’s Royce & Associates has the number one position in UniFirst Corp (NYSE:UNF), worth close to $232.2 million, accounting for 1.2% of its total 13F portfolio. The second largest stake is held by Waratah Capital Advisors, led by Brad Dunkley and Blair Levinsky, holding an $23.3 million position; 4.9% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism encompass Jim Simons’ Renaissance Technologies, Joel Greenblatt’s Gotham Asset Management and Greg Poole’s Echo Street Capital Management.
Because UniFirst Corp (NYSE:UNF) has experienced a bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of funds that slashed their entire stakes in the third quarter. It’s worth mentioning that Boaz Weinstein’s Saba Capital dropped the largest stake of all the hedgies followed by Insider Monkey, totaling an estimated $1.1 million in stock. Peter Muller’s fund, PDT Partners, also cut its stock, about $0.3 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to UniFirst Corp (NYSE:UNF). We will take a look at Marriott Vacations Worldwide Corp (NYSE:VAC), Swift Transportation Co (NYSE:SWFT), Washington Federal Inc. (NASDAQ:WAFD), and PS Business Parks Inc (NYSE:PSB). This group of stocks’ market caps are similar to UNF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VAC | 18 | 44050 | 4 |
| SWFT | 38 | 268384 | 6 |
| WAFD | 13 | 73687 | 3 |
| PSB | 8 | 42976 | -2 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $107 million, compared to $328 million in UNF’s case. Swift Transportation Co (NYSE:SWFT) is the most popular stock in this table. On the other hand PS Business Parks Inc (NYSE:PSB) is the least popular one with only 8 bullish hedge fund positions. UniFirst Corp (NYSE:UNF) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SWFT might be a better candidate to consider a long position.
